By Mark Brenner ‘19
According to sources familiar with the search for a new president, the Federal Reserve intends to raise John Williams, the current San Francisco Fed President, to the top position of the New York Fed. New York presidency is one of the most influential positions for the central bank, so the selection can forecast what future fiscal policy might look like. The board of directors for the New York Fed made the recommendation for Williams to take the place of outgoing William Dudley. Approval of Williams could be released as early as next month. The position in New York is typically filled by someone with extensive financial market knowledge, but Williams would come into the role with a relatively different skillset. His appointment would indicate a shift in the central bank’s perception of the role, with a greater emphasis on understanding monetary-policy. Since his appointment as the San Francisco Fed’s president in 2011, Williams has been loyal to his counterparts in Fed leadership. Most recently, he voted with other leaders last week to raise interest rates. He has been known to say that there are notable risks in allowing interest rates to sit low for a considerable amount of time. Moreover, Williams claims that the economy is at full employment, so any further drop in unemployment will cause inflation to jump. After raising interest rates last week, the Fed continues to project an additional two rate hikes this calendar year, with three per year after that. The central bank confidently sees the current core inflation rate of 2 percent, and unemployment at 4.1 percent as near the Fed’s sustainable objectives. As a policy moderate and strong ally of current chairman Jerome Powell, Williams would likely remain in support of the Fed’s actions as he has done during his tenure, which means this nomination would further hint at the upcoming rate hikes. Sources:https://www.wsj.com/articles/new-york-fed-eyes-john-williams-as-its-next-leader-1522014655https://www.bloomberg.com/news/articles/2018-03-24/san-francisco-fed-s-williams-is-n-y-fed-frontrunner-wsj-sayshttps://www.cnbc.com/2018/03/24/san-francisco-feds-john-williams-reportedly-leading-candidate-for-new-york-fed.htmlhttps://www.cnbc.com/2018/03/23/feds-bostic-fed-at-or-near-goals-further-rate-hikes-needed.html