US: Changes in Federal Reserve Board announced – Nomura

Analysts at Nomura note that the US President Trump announced two widely-anticipated nominations to the Federal Reserve Board yesterday.

Key Quotes

“Richard Clarida has been nominated as Vice Chair of the Board, taking the seat last held by Stan Fischer. Clarida has both academic and market experience from his roles at Columbia University and Pimco. He will likely be able to provide Chair Powell with monetary policy advice while also helping to forge consensus on the FOMC.”

“We view Clarida as someone who is likely to follow Chair Powell on the Committee and is a centrist on the hawk-dove spectrum. President Trump also nominated Michelle Bowman to the Board, filling the slot reserved for a nominee with community banker experience. Bowman, currently the Kansas State Bank Commissioner, will also likely follow Powell’s lead on the Committee.”

“Both nominations are subject to Senate approval by a simple majority. We note that Marvin Goodfriend’s nomination to the Board looks increasingly uncertain as he faces united Democrat opposition and a “no” vote from Senator Rand Paul (R-KY), which are sufficient to effectively block his nomination. Conditional on Senate approval of Clarida and Bowman, and Goodfriend’s nomination potentially falling through, President Trump may have the opportunity to make two additional nominations to the Board.”