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Portfolio > Economy & Markets > Economic Trends

White House Considering Derek Kan for Fed Seat

By Saleha Mohsin

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The White House is considering Derek Kan, an undersecretary at the Department of Transportation, for one of two open seats on the Federal Reserve Board, according to two people familiar with the matter.

Kan, a senior adviser to Transportation Secretary Elaine Chao since 2017, has served on the board of directors for Amtrak after being nominated by former President Barack Obama in 2015, and was previously general manager at ride-hailing company Lyft Inc.

Kan has not been interviewed by the White House for the job but has had informal conversations with members of National Economic Council Director Larry Kudlow’s team, according to one of the people. Kan earned an MBA from Stanford University and studied economic history at the London School of Economics.

President Donald Trump has struggled to find candidates for the Fed that are acceptable to the senators who vote to confirm them. Trump has named four people for the two open seats on the board of governors.

None of them has made it through the Senate, raising questions about the White House vetting process for his picks.

Conservative economic pundit Stephen Moore on May 2 was the latest Fed candidate to flame out, following businessman Herman Cain and economists Nellie Liang and Marvin Goodfriend.

The White House hasn’t made a short-list of candidates, but instead has a handful of names that the administration is actively considering as advisers continue to gather resumes, according to one of the people familiar with the matter who discussed the search on condition of anonymity. The White House declined to comment.

Senate Confirmation

Kan won Senate confirmation 90-7 for his current job at the Transportation department. Already having gone through that process on Capitol Hill may help his chances to win approval again for the Fed should he be nominated. He would be the first Asian-American on the Fed board.

One Democratic Senator on Friday tweeted in Kan’s support. Brian Schatz of Hawaii said Kan is a “serious, smart person and a vast improvement over the previously mentioned names.”

Cain and Moore’s candidacies flailed after both Republicans and Democrats spoke-out against them. Cain was criticized over allegations of sexual harassment, and Moore over his past writings about women.

Another potential candidate to surface is conservative economist Judy Shelton, the current U.S. executive director for the European Bank for Reconstruction and Development.

Shelton, who’s served as an informal adviser to Trump, holds a Ph.D. in business administration with an emphasis on finance and international economics from the University of Utah.

Before the current zero-for-four streak Trump succeeded in filling three posts on the Fed board and elevating Jerome Powell, already a governor, to the chairmanship — though the president soured on him following the central bank’s string of 2018 interest rate increases.

The president also won Senate confirmation of Fed Vice Chairman Richard Clarida and the Fed’s vice chairman for supervision, Randal Quarles.

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