They hold sway over big portions of the American economy but aren't elected. Their names don't show up on any ballots. And they usually give up power only on their own accord.
The governors of the Federal Reserve are charged with overseeing the U.S. financial system, promoting the safety of banks and controlling the supply of money. They aim to have Americans who want jobs working and they want stable prices. Those charged with these functions come to them by presidential nomination and Senate confirmation. And they exercise them for 14-year terms if they don't resign first.
And while the Fed exerts its influence on everything from interest rates to banking stock dividends, it hasn't been at full strength for three years. Of its seven positions, there have been simultaneous vacancies going back to 2014. And in the week ahead, just days after the Senate confirmed President Donald Trump's first appointment to the central bank, another governorship will become vacant.
Stanley Fischer's retirement from the Fed takes effect Thursday. Two days, later he will turn 74. His resignation leaves three Board of Governor seats open and four filled. President Trump's nominations will reshape monetary policy and how financial regulations are carried out.
Janet Yellen's term as chair of the Fed expires in February. President Trump has not indicated if he will renominate her, and Yellen hasn't indicated if she's interested in sticking around. The two have tangled over financial reforms (Trump wants them loosened, Yellen thinks they should remain). As a candidate, Trump said he would "most likely replace" Yellen.
Why are these personnel decisions important? It's not politics. It's monetary policy. With Congress unable to make any meaningful headway on big tax or spending ideas, the Fed is left absorbing more economic responsibility. Filling these vacancies at the Fed will put a Trump imprint on the American economy for years to come.
About The Writer
Financial journalist Tom Hudson hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of "Nightly Business Report" on public television. Follow him on Twitter @HudsonsView.
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