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Trump to nominate economist Richard Clarida as Fed vice chair

Key Points
  • President Donald Trump is expected to nominate Pimco executive Richard Clarida as vice chair of the Federal Reserve.
  • In addition, he also likely will tap Kansas regulator Michelle Bowman for a vacant Fed governorship.
Trump to nominate Clarida as Fed's vice chairman
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Trump to nominate Clarida as Fed's vice chairman

President Donald Trump has resumed his efforts to put his own stamp on the Federal Reserve, preparing to nominate one person for vice chair and another for a governor's position, CNBC has learned.

The nominees are Richard Clarida, a Columbia University economist and global strategic advisor at bond giant Pimco who was tapped for vice chair, and Michelle Bowman, Kansas bank commissioner, who the president picked for an open governor's spot.

Both appointments had been rumored for months and come as Trump is trying to fill four vacancies at the central bank. One nominee, Marvin Goodfriend, faces an uncertain future as the name has been stuck in the Senate for months.

Clarida's nominee is key in that he will be the chief deputy for new Fed Chairman Jerome Powell. The position has been vacant since Stanley Fischer left in October.

The nomination comes at a critical time as the Fed is in the midst of normalizing policy after the extreme measures taken in the wake of the financial crisis. The Federal Open Market Committee, of which both nominees would be voting members, approved a quarter-point rate hike in March. It was the sixth rate increase since the Fed began normalizing policy in December 2015.

Richard Clarida
Scott Mlyn | CNBC

Clarida, 60, served as assistant Treasury secretary and has been an advisor to Pimco since 2006.

"We at PIMCO are thrilled to learn that President Trump has nominated Richard Clarida to be the next Vice Chairman of the Federal Reserve Board," the firm said in a statement. "Rich is an incredibly talented economist who has provided critical insights for our clients, investors and others throughout his many years at PIMCO and this nomination."

He is viewed as holding mostly conventional views on monetary policy and praised Trump's selection of Powell.

In particular, he noted in a blog post that Powell likely held the belief that "the pendulum in financial regulation has swung too far" since the crisis and probably needs some "prudent adjustments, especially for smaller banks."

For her part, Bowman is the head of the Kansas State Bank Commission. Congress created a special governorship for banking regulation in 2014, but the seat has gone unfilled.

She formerly served as a top official at Farmers & Drovers bank and worked for former U.S. Sen Bob Dole and as investigative attorney for the House Committee on Government Reform and Oversight and counsel for the House Committee on Transportation and Infrastructure.

Both nominations require Senate confirmation.

Another recent Fed development saw San Francisco President John Williams get the nomination for the same slot in New York. His nomination awaits full Fed approval.

—With reporting by Steve Liesman.