President Obama announced that he intends to nominate Stan Fischer, the former head of Israel’s central bank, to serve as the vice chairman of the Federal Reserve. It also was announced that he would nominate Lael Brainard, the former Treasury undersecretary for international affairs, and would renominate current Fed Governor Jerome Powell to another term on the Fed Board. The moves had been expected--nonetheless, it is worth celebrating an excellent set of appointments. Stan Fischer is one of the leading macroeconomists and economic policymakers of our generation, and the Fed is fortunate to have him. (Full disclosure--Stan is a former professor of mine, and currently a colleague at CFR.) Jerome Powell has, by all accounts, played an important role at the Fed, and Lael Brainard brings a wealth of international policy experience to the position.
I have been critical of the slow pace of White House appointments on the economic side. It was particularly important to move on this, because once Bernanke leaves and until these nominations are confirmed by the Senate, only four of the seven Fed Board seats would be filled (one of whom, Powell, would not be confirmed during that period). That would, among other things, create an imbalance vis-a-vis the district bank presidents (five of whom vote at meetings of the Federal Open Market Committee). Well done, and I hope they are rapidly confirmed.