A Chance to Build a More Inclusive Fed

Recent departures increase pressure to appoint more outsiders and minorities

- By Cristina Lindblad

The resignation of two Federal Reserve chiefs amid a stock trading scandal means an unexpected number of top monetary-policy jobs are coming up for grabs—and there’ll likely be an unusually intense spotlight on who fills them.

Eric Rosengren and Robert Kaplan, presidents of the Fed branches in Boston and Dallas, announced their retirements on Sept. 27 following disclosures about their trading activity last year.

The departures leave as many as six seats that could be filled in the coming months, at a time when the central bank is under pressure to make its top ranks more diverse. The appointments could also change the outlook for policy. Members are split on what to do in 2022, with half wanting to raise interest rates to head off inflation and the others wanting to hold rates at zero.

The Fed’s leadership in Washington is likely to command more influence over new appointments at the 12 district banks, a responsibility that typically falls to their boards, Fed watchers say. There’s “an opportunity for the Fed’s Board of Governors to initiate a more open and transparent process” for selecting Fed presidents, says Andrew Levin, a Dartmouth College economist and former Fed Board senior staff member. “Serious consideration should be given to a wide range of candidates, not just longtime Fed insiders or those with close ties to finance and wealth management.”