Senate Confirms Clarida (Econ '79) as Fed Vice Chairman

Date

08/29/18

Senate Confirms Clarida as Fed Vice Chairman in 69-26 Vote

Trump nominated Richard Clarida to the No. 2 Fed role in April

 
By Kate Davidson - Wall Street Journal
Photo: Andrew Harrer/Bloomberg News
Updated Aug. 28, 2018 5:26 p.m. ET
 

WASHINGTON—The Senate voted Tuesday to confirm Columbia University economist Richard Clarida to become Federal Reserve vice chairman, filling a top leadership position ahead of the central bank’s September policy meeting.

President Donald Trump tapped Mr. Clarida in April to serve as No. 2 to Fed Chairman Jerome Powell, whom Mr. Trump nominated last year.

 

The Senate confirmed Mr. Clarida to a four-year term as vice chairman in a 69-26 vote, with 23 Democrats joining 46 Republicans voting yes. Only one Republican, Sen. Rand Paul (R., Ky.), voted against the nomination. The Senate also confirmed Mr. Clarida, by voice vote, as a member of the Fed board to finish a term ending in February 2022.

The vote comes days after Mr. Trump, in a meeting with donors, raised doubts about Mr. Powell and said he was unhappy with the Fed’s recent moves to increase interest rates and raised doubts about Mr. Powell.

“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Mr. Trump said in an Aug. 20 interview with Reuters

The primary way presidents influence central bank policy is through nominations to the Fed’s seven-seat board of governors. With Mr. Clarida’s confirmation, three of the four current board members are Trump appointees and three vacancies remain.

Mr. Powell has repeatedly emphasized that the Fed makes policy decisions based on what is best for the U.S. economy, not politics. In minutes of their last meeting released Wednesday, Fed officials signaled they were likely to raise short-term interest rates next month

Mr. Clarida is a managing director and global strategic adviser at Pacific Investment Management Co. and since 1988 has been an economics professor at Columbia, including four years as department chair.

He is a Republican and monetary-policy specialist who is well regarded by economists on both sides of the aisle. Mr. Clarida is described by colleagues as more of a pragmatist than an ideologue.

He served as the top economist in the Treasury Department during the George W. Bush administration. Mr. Powell served at Treasury in the administration of George H.W. Bush.Randal Quarles, another Trump nominee and the Fed’s vice chairman for supervision, served at Treasury during both Bush administrations.

Mr. Clarida will fill the third leg of the traditional Fed policy leadership, alongside Mr. Powell and the president of the New York Fed, John Williams. The vice chairman’s position has been vacant since October 2017 when then-vice chairman Stanley Fischer resigned.

The outlook for two of Mr. Trump’s other Fed nominees remains uncertain as lawmakers prepare to leave Washington ahead of the midterm elections. The Senate Banking Committee voted to approve the nominations of Kansas regulator Michelle Bowman and Carnegie Mellon economist Marvin Goodfriend to the Fed board, but the full Senate hasn't yet voted to confirm them. 

Write to Kate Davidson at kate.davidson@wsj.com

Original article