White House Considering Mohamed El-Erian For Fed Vice Chair

In what will come as a big surprise to many Fed watchers, moments ago the WSJ reported that among other candidates, Mohamed El-Erian, former deputy director of the IMF, former head of the Harvard Management Company, Bill Gross' former partner at Pimco until the duo's infamous falling out, and one of the few people who - together with John Taylor - actually deserve the nomination, is being considered for the Fed Vice Chairman role. DJ also added that Kansas banking regulator Michelle Bowman is also being considered. From the WSJ:

The White House is considering economist Mohamed El-Erian as one of several candidates to potentially serve as the Federal Reserve’s vice chairman, according to a person familiar with the matter.

The process of selecting the Fed’s No. 2 official began this month after President Donald Trump nominated Fed governor Jerome Powell to succeed Fed Chairwoman Janet Yellen when her term expires next February.

The WSJ adds that there is a broad range of candidates under consideration for post, and that the White House will focus on monetary policy experience for post.

Reportedly, the White House is also considering the nomination of a Kansas banking regulator for a seat on the Fed’s board of governors, according to two people familiar with the matter.

Michelle Bowman was confirmed as the Kansas bank commissioner in January and would be nominated to a spot reserved for a community banker or regulator of community banks. In 2014, Congress reserved one of seven seats on the Fed’s board for a community banker and the position has never been filled.

For those unfamilair, here are some recent perspectives on El-Erian's recent thoughts:

And some recent notable quotables:

  • "The Fed's embarked on this beautiful normalization: It has stopped [quantitative easing], it has raised rates, it has declared a path to reduce its balance sheet without disrupting markets and without derailing the global recovery. And I don't think anybody will want to mess with this beautiful normalization”
  • “We don’t understand very well why inflation is low. And therefore, should inflation be an over-determining factor in monetary policy? On the other hand, how concerned is the Fed about elevated asset prices?”
  • “I suspect the market is too sanguine when it comes to how much central bankers are thinking about the risk of financial instability down the road."


Cafe Baghdad Tue, 11/14/2017 - 11:12 Permalink

We have all heard of Rothschild and Rockfeller, but ontop of them sits David Sassoon, master of asian opium.   He controls everything, markets oil, Banks. He was thrown out of Baghdad in 1812. https://en.wikisource.org/wiki/Twentieth_Century_Impressions_of_Hongkong... Everybody works for him. Everyone in the USA and everyone in Europe. His son Abdullah anglicised Albert married Aline Caroline de Rothschild in 1887.   he owns your ass.

Paul Kersey IH8OBAMA Tue, 11/14/2017 - 12:11 Permalink

Goldmanite Dudly is retiring from the FRBNY, so he must be replaced with another Goldmanite, or, better yet, someone from PIMCO. With Goldman Sachs President Cohn in charge of the US economy, filling that Fed chicken coop spot with another banster fox will be easier to grease than a minor getting a Kevin Spacey Jiffy Lube. Once again, Americans will be taking it up ___ (fill in the blank)."New York, October 14, 2008 - Mohamed El-Erian today won the Financial Times andGoldman Sachs Business Book of the Year Award"What further endorsement could Mohamed El-Erian want?  Got to love that NWO.  

In reply to by IH8OBAMA

EddieLomax Juggernaut x2 Tue, 11/14/2017 - 11:59 Permalink

Definitely, at least restore the link between currency and gold.  Ever since that was broken the government debt has been doubling every 8 years.  That is the force that sucks the prosperity away from 90% of Americans.The last thing we need are crypto-currencies, they're already multiplying and forking away as bad as the current fiat, but without its usefulness as a simple exchange instrument.

In reply to by Juggernaut x2

hooligan2009 Tue, 11/14/2017 - 11:27 Permalink

since the Fed only has the power to create stock market, housing and bond bubbles and collapses, and no ability to impact inflation, unemployment and economic growth (which are all meaningless indicators with error terms larger than their stated percentage changes) it mattrs naught who is appointed.the same applies to the BoE, the BoC, the BoJ and the ECB - completely meaningless constructs folllowing a failed monetary policy expeirment for decades and a ludicrous one for ten years.this chap is better qualified to be a fed governor or any other central bank voting member and has twice as much natrual talent and rhythmn.https://www.youtube.com/watch?v=jZ572yLH9sc

Ajax4Hire Tue, 11/14/2017 - 11:29 Permalink

When Mohamed El-Erian speaks, I listen.I listen because he seems to be correct and accurate on so many aspects of finance, monetary policy and the economy.  He speaks with understanding of the details and vision of the large scale issues.It would be an amazing advantage if the United States could get such a competent, well-versed person in such an important position.Unfortunately, I do not have much hope given the political process he will have to endure.

itstippy Tue, 11/14/2017 - 11:44 Permalink

El-Erian would be a great choice.  He has real experience in the financial world, not just acedemic economics.  He's not (overtly) political; he seems to be open-minded and not just constantly pushing an existing agenda.  He makes sense when he talks and writes.  He's not an arm-waving cheerleader for financial markets.All that could change, of course, if he gets the position.  Fed membership changes people (see Greenspan).If the Trump Admisinstration nominates a guy named "Mohamed", both the DNC and RNC will once again be running around with their hair on fire trying to figure out what to do about The Donald.  That's always highly desireable.  I'm not a Trump fanboy, but he does throw the two major political parties' hierarchy into utter chaos, and for that I applaud.

Quivering Lip Tue, 11/14/2017 - 11:47 Permalink

For a moment lets "pretend" that the "Federal" Reserve is a private entity owned by US and non US banks. Let's also "pretend" that the major majority of the banks that OWN the "Federal" Reserve are owned by a small minority of families and or people.That being said, does it really matter who the vice chairman of the "Federal" reserve is. Do intelligent people truly believe that these millionaires on the FED board will dictate to multi billionaires  and trillionaires monetary policies.If they do, they are either liars or the dumbest fucks on the planet.

MrBoompi Tue, 11/14/2017 - 11:53 Permalink

Nice spin, WSJ.  You make it seem like the White House gets to choose who they want.  The Federal Reserve, a private company the US government does not control, is owned by its member banks.  Therefore, every one of the fed's employees has been hand choesen by the banks.  Trump may pick from a pool of "candidates", but he has no control over the pool.  The old addage "I don't care who does the electing so longs as I get to do the nominating" is never more appropriate as it is in this example.  

buzzsaw99 Tue, 11/14/2017 - 11:53 Permalink

el erian never said he liked bitcoin.  in fact it sounds like the opposite: But this is not to say that gold’s traditional role will not be re-established down the road. After all, central banks are in the later stages of reliance on unconventional monetary measures and, given this year’s spectacular price appreciation, cryptocurrencies are more vulnerable to unsettling air pockets.

pitz Tue, 11/14/2017 - 11:55 Permalink

Good lord, why would Trump even consider anyone from the "leech" rather than "production" side of the economy?If El-Erian is appointed, it will be confirmation that not only is Trump part of the swamp, he practically *is* the swamp epitomized.

hooligan2009 Tue, 11/14/2017 - 12:29 Permalink

in el-arian's last "proper" job, after PIMCO's dismal investment returns, things fell apart..remember this?In a Wall Street Journal report he now describes as “the crusher”, Mr Gross allegedly told Mr El-Erian: "I have a 41-year track record of investing excellence…What do you have?" Mr El-Erian responded, "I'm tired of cleaning up your s***".so.. bottm line is, along with central bankers, a complete fuck-up in making money in the real world. as longas bulsshit is the order of the day, all is fine - so he should fit right in.bleh