Marvin Goodfriend, a widely respected monetary economist and sometime critic of the Federal Reserve under Chair Janet Yellen, is a finalist among candidates President Donald Trump is weighing for a seat on the central bank’s Board of Governors, according to a person familiar with the process.
Goodfriend, a professor at Carnegie Mellon University and a former director of research at the Richmond Fed, serves on an independent panel of economists known as the Shadow Open Market Committee aimed at providing alternative views on monetary policy.
In testimony before a congressional subcommittee in March, Goodfriend spoke of “the Fed’s failure to secure the credibility of its inflation target” and the risks that created for policy and the economy. He’d join at critical junction for U.S. monetary policy, as Fed officials deliberate over how fast to raise interest rates and shrink their $4.5 trillion balance sheet.
“He’s an exceptional thinker about monetary policy and is deeply respected at all levels of the Federal Reserve system,” said Gregory Hess, president of Wabash College in Crawfordsville, Indiana, and a fellow Shadow member. “I wouldn’t characterize him” as either a hawk or a dove, said Hess. “He looks at each situation on merit.”
In a March 3 interview on Bloomberg Radio, Goodfriend described himself as “someone who believes in the stability of the price level.”
Goodfriend’s candidacy was reported earlier by the New York Times. He would join Randal Quarles, a senior Treasury official in the administration of President George W. Bush, in waiting for the White House to formally nominate him for a spot on the Board of Governors.
It was reported in April that Trump picked Quarles as the Fed governor who would also serve as vice chair for supervision, heading the central bank’s financial regulatory efforts.
In his testimony in March, Goodfriend said the Fed needed to solidify its commitment to its 2 percent inflation target, arguing that its adherence to that goal will be tested now that the economy has recovered and the U.S. is at full employment.