The board of directors of the New York Federal Reserve bank appears to have settled on San Francisco Fed President John Williams to be its next president, sources tell CNBC, despite pressure to find a woman or a candidate of color — and one with deep expertise in financial regulation.
The job, for which The Wall Street Journal first reported Williams was in the running, is among the most powerful financial sector positions in the country. The New York Fed President serves as the vice chairman of the rate-setting Federal Open Market Committee (FOMC), and the New York Fed supervises the big money center banks in the nation's financial capital.
Williams is a 55-year-old PhD economist, and a leading monetary policy expert who has spent nearly a quarter-century at the Fed. He is viewed as a centrist, supporting gradual rate hikes now. However, he is a leading proponent of the dovish view of keeping a relatively low interest rate for the economy in the long run.
Uncertainty in the White House, specifically the failure so far of President Donald Trump to nominate a vice chairman of the Fed, was also said to be play a role. The New York Fed board felt as if a monetary policy expert was the best choice, given that Fed Chairman Jerome Powell is not an economist. A vice chairman of the board may not be seated for several months, since a person has not yet been nominated.
Williams must still be formally nominated by the New York Fed Board and approved by the Federal Reserve Board of Governors. Unlike the chairman and vice chairman of the Federal Reserve, the NY Fed president is not confirmed by the Senate.
If he takes the post, it would come after the New York Fed's board of directors made several public comments about seeking a diverse pool of candidates for the job. It announced in November, after the resignation of current President William Dudley, that it had hired two search firms to seek his replacement — including one specifically charged with seeking diverse candidates.
The search itself came after strong criticism from Democrats in Congress and some outside interest groups about the lack of diversity at top positions on the Fed. Since 2014, when three women took policy making roles, none has been among the seven appointments of Fed bank presidents or Fed governors.
Among the seven, however, is one African-American and one Indian-American. Of the 15 bank presidents and governors who make up the rate-setting FOMC, 3 are women.