2 Important Appointments to Fed Bd of Gov
Looks like an insider balanced by a high credentials pick.
<All Cylinders May Soon Be Firing At The Fed The two unmanned seats on the Federal Reserve Board of Governors look like they might finally be catapulted back into action, so that the board could be firing on all seven cylinders before long. The empty seats have been languishing uncomfortably in the background while the board has been working overtime with just five members participating. But it is widely reported that President Bush has now singled out two possible candidates for the board: Princeton economist Ben Bernanke and Federal Reserve official Donald Kohn.
Bush has so far made two appointments to the board, Susan Bies and Mark Olson, who both have banking
backgrounds, satisfying the demand for expertise in this area. Presumably Bernanke and Kohn are
intended to plug the gap in the board left by Laurence Mayer's departure when his term expired in January,
rendering the board short on economists. And these heavyweight economists are eminently eligible to take
on the job - should they get it.
Over his 48 years, Bernanke has notched up a gleaming set of academic credentials: he is the chairman of
the Princeton economics department and hailed as one of the world's leading academic authorities on
monetary policy. He also has a Phd from MIT, a BA from Harvard and has taught at Stanford. Bush went as
far as to summon Bernanke to the White House on April 17, indicating that he is a hot favourite for the
spot. Bernanke is also part of the elite National Bureau of Economic Research where he is director of the
Monetary Economics Program, as well as sitting on an advisory body to the New York Fed. The fact that he
is an advocate of inflation-targetting has caused some comment, as the Fed does not have a formal target.
Kohn, who is 59, has a rather different background, very much an insider - he has been at the Fed since
1975 and is one of Greenspan's right hand men. Since last June he has advised the Fed board on monetary
policy and helps write many of Greenspan's public statements. Before that he spent 14 years as the
director of the Fed's division of monetary affairs. He is well known also internationally - he wrote a quite
critical report two years ago on the processes of the Bank of England's Monetary Policy Committee (many
of his recommendations have in fact been implemented). Kohn would be the first senior Fed board staff
member to be appointed to the board since former Fed governor J. Charles Partee in 1976 and only the
third senior staff member ever to join the board directly from the Fed's staff. Should he get the job, he will
be facing a drastic pay cut: top staff members like him have their pay capped at $192,000, while members
of the board are paid $150,000.>
centralbanking.co.uk
Meanwhile, back in the trenches, the dollar is testing recent lows
quotes.ino.com
And the PM stocks, so far, aren't obliging traders with a correction. But bearish divergences are building in stocastics and RSI that point to a ST double top here.
stockcharts.com[w,a]dacayyay[db][pb50!d20,2!f][vc60][iut!Ub20!Lp20,20]&pref=G
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