February 13, 2018 / 10:09 PM / 2 years ago

White House speaks with Mester about Fed vice chair opening: source

Loretta Mester, president of the Federal Reserve Bank of Cleveland, speaks during an interview in Manhattan, New York, U.S., August 15, 2017. REUTERS/Shannon Stapleton

WASHINGTON (Reuters) - The White House has spoken with Loretta Mester, the president of the Federal Reserve Bank of Cleveland, about the vice chair opening at the Federal Reserve Board, a person familiar with the process said on Tuesday.

The source said the team considering nominees for the opening was impressed with Mester, but said there was no front-runner for the position at this point, and declined to confirm names of other candidates under consideration.

A Cleveland Fed spokesman declined to comment on the matter to Reuters. The consideration of Mester for the job was first reported by the Wall Street Journal.

Earlier Tuesday Jerome Powell was officially sworn into the top spot at the Fed, the first U.S. central bank chief since the 1970s who is not a trained economist.

He faces an early test of his leadership as the Fed weighs the significance of a recent market downturn and jump in long-term bond yields, as well as the risk the Trump administration’s tax and spending policies may light the fuse of unexpectedly fast inflation.

Mester, who has a PhD in economics and was research chief at the Philadelphia Fed for more than a decade before taking over at Cleveland in 2014, said earlier Tuesday that recent market turbulence had not changed her forecast for continued economic growth and her support for three rate hikes this year.

San Francisco Fed President John Williams, whose research on monetary policy and interest rates has been influential both inside and outside the U.S. central bank, is also under consideration for the post, the Wall Street Journal has reported. He has declined to comment on the search.

The Fed vice chair is part of the trio of policymakers at the center of U.S. rate-setting that traditionally is led by the Fed chair and also includes the chief of the New York Fed.

The No. 2 spot at the Fed has been open since the October retirement of Stanley Fischer. The New York Fed is seeking a successor to its chief, William Dudley, who is set to retire later this year.

Reporting by Steve Holland with reporting by Ann Saphir and writing by Roberta Rampton; Editing by Jonathan Oatis and Tom Brown

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