Neil Irwin writes about the options facing the Federal Reserve Open Market Committee as it heads toward a meeting later this month. Who’s on the FOMC? Well, the President of the New York Fed plus a rotating cast of regional Fed Presidents, plus the seven members of the Board of Governors. Who are they?
That’s not seven people! That’s only five! One of those seats is vacant because Senator Richard Shelby (R-AL) thought an economist with a Nobel Prize wasn’t qualified for the job. The nominee in question withdrew, and Obama hasn’t named anyone else. The second open slot nobody’s ever been nominated for. It seems to me that with two seats open, it ought to be possible to work something out. And if it’s not possible to work something out, then there ought to be a partisan fight. Just letting the power to appoint people to the most important economic policymaking institution in the country languish isn’t an acceptable outcome. The single largest influence on President Obama’s re-election prospects is the short-term performance of the economy, and the single largest influence on the short-term performance of the economy is the Fed.