Two of the Federal Reserve board’s seven governors abstained from supporting the selection of former Obama aide Austan Goolsbee to become president of the Chicago Fed, according to a record of the vote.
(Bloomberg) — Two of the Federal Reserve board’s seven governors abstained from supporting the selection of former Obama aide Austan Goolsbee to become president of the Chicago Fed, according to a record of the vote.
Governors Michelle Bowman and Christopher Waller, who were both appointed to the board by former President Donald Trump, withheld their support for Goolsbee, who took up his post last month. The records were obtained by Bloomberg News Friday through a Freedom of Information Act request.
The abstentions are unusual, particularly because Waller heads the reserve bank oversight subcommittee at the board, which means he would have been in communication with the Chicago Fed’s directors before they made their final pick.
Unlike selections to the Fed board in Washington, which are presidential nominations subject to Senate confirmation, the heads of the 12 regional Fed banks are picked by their local directors, though the board does also have a vote.
The abstentions suggest some wariness on the selection by both governors. Both Waller and Bowman declined to comment. Chicago Fed spokesman Michael Adleman also declined to comment.
“Waller and Bowman’s abstentions signals a concern about the Fed steering clear of partisan perspectives — whether that was intended or not by their withholding of support,” said Sarah Binder, a senior fellow at the Brookings Institution in Washington.
The Chicago Fed appointment was also under scrutiny in Congress. Senate Banking Committee member Robert Menendez, a New Jersey Democrat, is pushing for a Hispanic leader and called the final selection “a slap in the face” for Latinos.
Goolsbee was an economic adviser to former President Barack Obama, as well as to Department of Transportation Secretary Pete Buttigieg during his 2020 presidential run.
Goolsbee has a long record of criticizing Republican policies, and partisan commentary.
Chair Jerome Powell was appointed to the position by Trump and was nominated for a second term by President Joe Biden. Powell supported the Goolsbee pick, the record shows, as did all other governors, who were nominated by Biden or Obama.
The Chicago Fed announced its pick of Goolsbee Dec. 1. He started the job in January and cast his first vote on monetary policy earlier this month.
The Wall Street Journal reported the White House is considering Goolsbee as a candidate to replace Vice Chair Lael Brainard, who is departing the board next week to become Biden’s top economic adviser.
Before joining the Chicago Fed, Goolsbee was a professor at the University of Chicago’s Booth School of Business. He is a macroeconomist with a doctorate from Massachusetts Institute of Technology, and obtained master’s and bachelor’s degrees at Yale University.
His years as head of the Council of Economic Advisers for Obama showed his polished communication skills, an asset for monetary policy these days, and his expertise on innovation and fiscal policy will likely add to the Fed’s debate on business cycles.
“He is eminently qualified,” said Julia Coronado, president of MacroPolicy Perspectives LLC. “He has held major economic positions” involving policymaking.
Waller also abstained from a board vote for a Chicago Fed director last May, a record obtained through FOIA showed. Juan Salgado, the chancellor of the City Colleges of Chicago, joined the Chicago Fed board in June. Waller’s vote was again an unusual break with consensus. Salgado is on the board of the Obama Foundation. Waller declined to comment on his Chicago Fed director abstention.
(Updates with Waller declining to comment on director abstention in final paragraph)
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