The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

By Don Lee, Tribune Washington Bureau

WASHINGTON — Stanley Fischer, the former Bank of Israel head picked by President Barack Obama for the No. 2 job at the Federal Reserve, won Senate confirmation Wednesday to become a member of the Fed’s board of governors.

The 68-27 vote in favor of Fischer means he will have little trouble being installed as the central bank’s vice chair when a separate Senate vote on that appointment is taken later.

Fischer, 70, would succeed Janet L. Yellen, who moved up to become the Fed chairwoman earlier this year. An internationally respected economist with a dual U.S. and Israeli citizenship, Fischer joins the Fed at a challenging time.

Yellen and her colleagues have been gradually reducing their bond-buying stimulus program aimed at lowering long-term interest rates, and the Fed is looking ahead to the day when it will need to raise its key short-term interest rate, which has been pinned near zero since late 2008.

In fact, in their policy meeting last month, Fed officials had a broad discussion about how they might hike rates and manage an “eventual normalization” of monetary policy, according to an account of the meeting, released Wednesday with the usual three-week lag.

Many analysts don’t expect the Fed’s so-called federal funds rate to rise until about the middle of next year, but that will depend on the economic conditions, in particular employment and inflation trends. After a winter stall, the American economy and job growth are showing signs of gaining momentum again, but the housing market has slowed and the global outlook remains hazy.

In its last meeting three weeks ago, the Fed generally viewed the economy as having “returned to a trajectory of moderate growth,” the minutes indicated. But some officials thought it was too early to say the pickup would be sustained, expressing concerns about a “persistent slowdown in the housing sector” or a “further slowing of growth in China or an increase in geopolitical tensions regarding Russia and Ukraine.”

The Fed’s next monetary policy meeting is set for June 17-18, likely to be Fischer’s first as vice chair of the board.

In recent weeks the Fed has been operating short-handed as a series of departures and the slow confirmation process had left three vacancies in the seven-member board, with another governor, Jeremy C. Stein, set to step down May 28.

A second Obama nomination to the board, Lael Brainard, a former Treasury official, is also expected to win confirmation, but it isn’t clear when that vote will be taken.

As second-in-command to Yellen, Fischer is expected to be a loyal supporter of the chairwoman and will bring many years of experience in finance and economics. He was the top deputy at the International Monetary Fund in the 1990s and a vice chair at Citigroup from 2002 to 2005. Previously Fischer taught at the University of Chicago and Massachusetts Institute of Technology, where his students included former Fed Chairman Ben S. Bernanke and former Treasury Secretary Lawrence Summers.

AFP Photo/Timothy A. Clary

Want more economics news? Sign up for our free daily newsletter. 

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

John Eastman

Reprinted with permission from MediaMatters

The ABC, CBS, and NBC morning and evening news broadcasts have all ignored the revelation that one of then-President Donald Trump's lawyers authored a memo laying out how Trump could effectively pull off a coup.

John Eastman, a member of the conservative legal establishment who worked with Trump's legal team as the then-president sought to overturn the results of the 2020 election, wrote the document in the days leading up to the January 6 counting of electoral votes. His plan lays out various ways then-Vice President Mike Pence and congressional Republicans could use that

Keep reading... Show less

Reprinted with permission from Alternet

It remains to be seen whether or not President Joe Biden's $3.5 trillion "human infrastructure" plan — which includes federal funding for health care, education, child care and combating climate change — will ultimately make it to his desk to be signed into law. The $3.5 trillion price tag is drawing resistance from Republicans as well as centrist Democrats like Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona. But 17 economists, all Nobel Prize recipients, have signed a letter endorsing the plan, which members of the Biden Administration see as crucial to his Build Back Better agenda.

Keep reading... Show less
{{ }}