Senate Panel Chief in No Rush on Fed Nominees

By Ben Leubsdorf And Victoria McGrane 

        The powerful chairman of the Senate Banking Committee signaled he is in no hurry to act on President Barack Obama's two picks for vacant seats on the Federal Reserve's Board of Governors.
        Sen. Richard Shelby (R., Ala.) said Tuesday that he had no immediate plans to schedule confirmation hearings for University of Michigan economist Kathryn Dominguez, whose pending nomination was announced Monday, or former Bank of Hawaii Chief Executive Allan Landon, whom Mr. Obama nominated in January.
        Mr. Shelby said committee staff would first work on vetting the candidates.
        "These are important nominations. We're not going to rush to judgment on them, but we will investigate them...and look at their qualifications, and weigh them, and then take the next step," Mr. Shelby said.
        Mr. Shelby had said in April he would wait to act on Mr. Landon until the White House moved to fill the second vacancy on the seven-seat Washington-based board. Now, the banking industry is set to push for swift action on both nominees.
        Camden Fine, president of the Independent Community Bankers of America trade group, said he "will urge Chairman Shelby to hold hearings as soon as possible and get these nominees out on the floor." Both are "highly qualified individuals," he said, and lawmakers have had six months to look into Mr. Landon.
        Mr. Fine said he hopes for confirmation hearings in September, after the August congressional recess, followed by committee votes that could advance both nominees to the full Senate by late October.
        That timeline would mean neither Mr. Landon nor Ms. Dominguez would attend the Fed's Sept. 16-17 policy meeting, when many economists expect the U.S. central bank will begin raising short-term interest rates from near zero.
        If the Senate confirms them, the board would be at full strength for the first time since August 2013.
        Both nominees will likely face questions from senators about their views on monetary policy as well as the Fed's regulatory responsibilities. When it comes to interest rates, though, Fed governors tend to vote with Chairwoman Janet Yellen and keep any disagreements behind closed doors. No governor has cast a dissenting vote in nearly a decade, according to an analysis by St. Louis Fed economists, while the presidents of regional reserve banks frequently dissent.
        Ms. Dominguez's collegial temperament is well suited to a consensus-minded organization like the Fed, said friend Greg Mankiw, a Harvard University economist and former chairman of the Council of Economic Advisers under President George W. Bush. He described her as open-minded, easygoing and "not dogmatic," a "data-driven" mainstream economist.
        "I think she's one of the people who will listen to all of the arguments, look at all the data and end up in the mainstream of monetary policy," he said.
        She's an uncontroversial choice, he added. "I know nothing in Kathryn's background that would raise any red flags for Republican senators," Mr. Mankiw said.
        Ms. Dominguez has spent her career in academia, teaching at Harvard's John F. Kennedy School of Government from 1987 to 1997 before joining the University of Michigan, where she is a professor of public policy and economics. She's also served on academic advisory panels for the Chicago Fed and the Cleveland Fed and held research positions with the Bank for International Settlements, the World Bank, the International Monetary Fund and the National Bureau of Economic Research.
        Her work has focused on foreign-exchange rates and central-bank currency interventions, though she's also written and spoken on the broader economy in recent years. She hasn't appeared to take issue with the Fed's easy-money policy since the financial crisis, telling Bankrate.com last summer that policy makers were "nervous about putting the brakes on what is a very muted recovery relative to what we've seen after past recessions."
        For now, members of the Senate Banking Committee seem to be reserving judgment. "I'm looking forward to meeting with her and having a long conversation with her," Sen. Elizabeth Warren (D., Mass.) said at a press conference Tuesday.
        (END) Dow Jones Newswires

        July 21, 2015 15:42 ET (19:42 GMT)

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