Randal Quarles, vice chairman of the US Federal Reserve, and Richard Clarida were reminded Tuesday that their term may soon be over.
Quarles’ term as Fed chief banking regulator expires on October 13, while Clarida’s term ends on January 31, several weeks before Chairman Jerome Powell’s term ends.
President Joe Biden, who can reshape the leadership of the Fed if he wants to replace any of them, is under pressure from some Democrats to remove Quarles.
The Powell and Quarles Fed’s withdrawal of some banking rules has drawn criticism from Democrats, even if they applaud the central bank’s ultra-light monetary policy in support of the post-pandemic economic recovery.
Clarida ushered in an institutional rethinking of the Fed’s approach to its stable price and maximum employment goals to be more inclusive – a shift much welcomed by Democrats.
During an interview with Yahoo! In the finance department, he was asked whether he had held talks with the Biden administration about a possible reappointment.
“I haven’t had any such discussions,” said Clarida. “I am immensely enjoying being vice chairman of the Fed. It has been an immense privilege to do so and I strive to get as much done as possible in my remaining time in this position.”
Biden says he didn’t speak to Powell out of respect for the Fed’s independence – a sharp contrast to his predecessor Donald Trump, who publicly berated the presidency over political decisions.
Even so, the White House selection process is likely to coincide with the Fed’s deliberations on scaling back massive monthly bond purchases, making it potentially of great concern to Biden’s presidency.
Depending on how it is handled, this could create uncertainty about who will be at the top as the Fed tries to adjust policies cautiously without confusing financial markets or holding back economic recovery.
Powell has diverted all questions about whether he would stay on top if asked but says he loves the job. Around three-quarters of the economists polled by Bloomberg predict that Biden will offer him another term.