White House Considering Mohamed El-Erian For Fed Vice Chair
In what will come as a big surprise to many Fed watchers, moments ago the WSJ reported that among other candidates, Mohamed El-Erian, former deputy director of the IMF, former head of the Harvard Management Company, Bill Gross’ former partner at Pimco until the duo’s infamous falling out, and one of the few people who – together with John Taylor – actually deserve the nomination, is being considered for the Fed Vice Chairman role. DJ also added that Kansas banking regulator Michelle Bowman is also being considered. From the WSJ:
The White House is considering economist Mohamed El-Erian as one of several candidates to potentially serve as the Federal Reserve’s vice chairman, according to a person familiar with the matter.
The process of selecting the Fed’s No. 2 official began this month after President Donald Trump nominated Fed governor Jerome Powell to succeed Fed Chairwoman Janet Yellen when her term expires next February.
The WSJ adds that there is a broad range of candidates under consideration for post, and that the White House will focus on monetary policy experience for post.
Reportedly, the White House is also considering the nomination of a Kansas banking regulator for a seat on the Fed’s board of governors, according to two people familiar with the matter.
Michelle Bowman was confirmed as the Kansas bank commissioner in January and would be nominated to a spot reserved for a community banker or regulator of community banks. In 2014, Congress reserved one of seven seats on the Fed’s board for a community banker and the position has never been filled.
For those unfamilair, here are some recent perspectives on El-Erian’s recent thoughts:
- El-Erian likes Bitcoin/Blockchain
- Fears a China Minsky Moment
- Is aware of equity market disconnect from reality
- Thinks The Fed Put is gone
- Is not surprised by low inflation
And some recent notable quotables:
- “The Fed’s embarked on this beautiful normalization: It has stopped [quantitative easing], it has raised rates, it has declared a path to reduce its balance sheet without disrupting markets and without derailing the global recovery. And I don’t think anybody will want to mess with this beautiful normalization”
- “We don’t understand very well why inflation is low. And therefore, should inflation be an over-determining factor in monetary policy? On the other hand, how concerned is the Fed about elevated asset prices?”
- “I suspect the market is too sanguine when it comes to how much central bankers are thinking about the risk of financial instability down the road.”