Fed Reserve Vice-Chairman Quits
Has anyone seen this?
TIMES ONLINE reports "US Fed's deputy chief quits"
ROGER FERGUSON, the respected vice-chairman of the US Federal Reserve, surprised Wall Street yesterday when he announced that he is to quit, less than a month after Ben Bernanke took over from Alan Greenspan as Fed Chairman.
Mr Ferguson, 54, said that he would step down from the Fed at the end of April “to pursue other professional opportunities”. The sudden announcement caught Wall Street investors and analysts off guard but markets largely took the news in their stride.
Economists said, however, that Mr Ferguson’s decision to leave so soon after a new chairman took the helm at the US central bank from the revered Mr Greenspan ran some risk of adding to markets’ edginess over the transition at the top.
“The market will probably be very interested in what the President has to say and in who (his) appointee is,” Ed McKelvey, senior US economist at Goldman Sachs, said.
BUSINESSDAY puts a different spin on the situation and states "Bernanke can now play numbers game with Fed traditionalist Ferguson leaving. "
US FEDERAL Reserve vice-chairman Roger Ferguson’s resignation may help new Fed chief Ben Bernanke win support at the central bank for a numerical inflation goal.
Ferguson — whose resignation on Wednesday afternoon takes effect on April 28 after eight years on the Fed’s board of governors — opposes an inflation target, partly because it may limit the central bank’s flexibility. Bernanke’s support for such a move has been a hallmark of his work as an economist.
The absence of Ferguson and former chairman Alan Greenspan removes the two biggest obstacles to a Fed inflation goal, leaving governor Donald Kohn as the only board member known to disagree with the approach.
Ferguson was “one voice that would have been against that change in the Fed’s way of doing business”, said Princeton University economist Alan Blinder, who was Fed vice-chairman from 1994 to 1996.
Ferguson, who was close to Greenspan, leaves the Fed at a time of transition. Greenspan retired last month after more than 18 years atop the central bank, and two new governors, Randall Kroszner and Kevin Warsh, are waiting to be sworn in.
A majority of the board’s seven slots will have turned over in less than a year. Ferguson was the last governor to have been originally appointed before US President George Bush took office.
Like rats bailing a sinking ship, the Fed Reserve has (in 1 short year) lost most of its corporate knowledge base and tenured leaders. How do you think this will impact Fed policy and the confidence of markets? What are the implications to this latest departure? Ben is quickly running up to the 2-month window of change that has caused turmoil for his predecessors. Will we see a crisis anytime soon?