Choice for New York Fed leader frustrates progressives
The Federal Reserve Bank of New York announced Tuesday that economist John Williams will be its next president and chief executive officer, one of the top leadership roles at the Federal Reserve that plays a large part in overseeing Wall Street.
Williams, who has led the San Francisco Federal Reserve Bank since 2011, will take control of the most prominent regional bank of the Fed. The New York Fed is unique among the Fed’s 12 regional banks: It handles a lot of Wall Street supervision. The leader of the New York Fed also gets a permanent seat on the committee that sets U.S. interest rates, which are currently at the highest level in a decade and expected to rise further soon.
The New York Fed leader was chosen by a selection committee and does not require confirmation from the U.S. Senate. He will take over on June 18.
Williams is seen as a close ally to current Fed Chairman Jerome Powell, and he has always voted with the majority on interest rates and other key decisions, but his selection comes with an unusual amount of controversy.
Progressives, including Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., are upset that the search committee is once again choosing a white male at a time when the Fed’s leadership is already 80 percent male and 87 percent white. The New York Fed has never been led by anyone other than a white male during its 104-year history.
Warren is also worried that Williams won’t be a hard enough watchdog on big banks, and she is demanding that Williams and the heads of the search committee appear before the Senate Banking Committee, even though it is not required. There is ongoing debate about whether the government should have a role in the appointment of regional Fed presidents.
Some on Wall Street are also concerned that Williams, a Stanford economist who has spent most of his career at the central bank, does not have enough experience with markets.