Former Federal Reserve economist Nellie Liang withdrew from consideration for a seat on the central bank’s board of governors, the White House announced Monday.
Liang dropped out of her own accord and wasn’t pressured by the White House, said a person familiar with the matter. There haven’t been any White House discussions of withdrawing the other pending nominee for a vacancy on the Fed board, Carnegie Mellon University professor Marvin Goodfriend, the person said.
While the Fed Board can operate quite easily with both positions vacant, her withdrawal may give President Donald Trump an opportunity to nominate someone whose views on interest rate increases are closer to his own.
Trump has for months attacked Federal Reserve Chairman Jerome Powell for raising rates, and Bloomberg News reported Dec. 21 that the president had discussed firing Powell, whom he nominated to the position. One of the ways that Trump can directly influence monetary policy is through nominations to the board, though anyone he picks must be confirmed by the Senate.
Trump nominated Liang, currently a senior fellow at the Brookings Institution in Washington, for the post in September.
“We regret to announce that today Nellie Liang notified us that she has withdrawn from nomination to the Federal Reserve Board of Governors,” White House spokeswoman Lindsay Walters said in a statement. “We supported her nomination and believe she would have made a good Governor. We thank Nellie for her long career of public service and wish her well.”
Liang previously led a Fed board division in charge of financial stability policy and research, a unit created after the 2008 financial crisis by former chairman Ben Bernanke.
“I have decided to withdraw my name from consideration to be a member of the Board of Governors of the Federal Reserve because the likelihood of a prolonged process could have left me in professional limbo for too long,” Liang said in an email.
Trump nominated Goodfriend in November 2017, but his nomination has languished in the Senate. Goodfriend’s confirmation looked like a shoo-in until his Jan. 23, 2018, hearing before the Senate Banking Committee when he appeared ill-prepared for an aggressive line of questioning by Democrats.
The Senate panel approved Goodfriend’s nomination but it never progressed, with the Republican leadership unsure they could muster the necessary votes on the Senate floor. It lapsed at the end of last year with the old Congress and the White House would have to renominate him if they want to keep trying to get him on the Fed.
“In the new Senate, Goodfriend could now have enough votes to win confirmation,” Capital Alpha analyst Ian Katz wrote in a note to clients. “But Trump may decide he would like to start again on both vacant Fed slots and look for candidates he’s confident would support lower interest rates.”
