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Powell’s Inner Circle Takes Shape With Clarida as Fed’s No. 2

U.S. President Donald Trump announced his intention to nominate Richard Clarida, a respected monetary economist and Pacific Investment Management Co. global strategic adviser, as vice chairman of the Federal Reserve.

In a White House statement released Monday, Trump also announced plans to nominate Kansas State Bank Commissioner Michelle Bowman as Fed governor representing the interests of community banks. Both selections are subject to confirmation by the U.S. Senate. The seven-seat Fed Board currently has four vacancies.

Powell's Inner Circle Takes Shape With Clarida as Fed's No. 2

Richard Clarida

Photographer: Christopher Goodney/Bloomberg

If confirmed, the 60-year-old Clarida would bring a mix of skills to the central bank’s No. 2 position. These include knowledge of financial markets gained during more than a decade at asset manager Pimco, to insights into how Washington works from his time at the Treasury Department under President George W. Bush.

His nomination also fills out the leadership team of new Fed Chairman Jerome Powell following the selection earlier this month of John Williams as the next head of the bank’s powerful New York branch. Powell, who doesn’t have a Ph.D. in economics, will now have two top-flight economists as his wingmen. A long-time professor at Columbia University, Clarida would replace Stanley Fischer, who stepped down as vice chairman in October.

Pragmatic Centrist

“I would describe him as centrist and pragmatic,” said New York University professor Mark Gertler, who has co-written a number of research papers with Clarida. “He has a nice balance between understanding and contributing to what the academic literature has to say and very practical, real world knowledge.”