Blog Post

The Next Fed Vice-Chair

| Nov. 01, 2017

There has been speculation that after Trump picks one of the five candidates to be chair of the Federal Reserve (with Jay Powell now apparently the front-runner), he could pick another one of them to be Vice-chair.  This latter position is the one that, sadly, Stanley Fischer is now vacating.

I hope that Trump asks Janet Yellen to be Vice-chair, assuming he breaks precedent and does not re-nominate her for Chair, and I hope she accepts.

Most pundits assume that Yellen would not dream of accepting the number two position.  Conventional wisdom is that no self-respecting Washington official would settle for a job of rank lower to the position previously held.  I have never quite understood this logic. The argument seems to be “if I can’t be the most powerful person, then I’d rather have no power at all than settle for the #2 slot.”

Historically not all Washington officials have obeyed the conventional wisdom.  John Quincy Adams had a long successful career as a Congressman, after failing to achieve a second term as president. William Howard Taft too was happier serving as Supreme Court Chief Justice than he had previously been in the White House.  Setting a worthy example, Fischer accepted the #2 job at the Fed in 2014 even though his abilities and experience would have qualified him to be Chair.  It would be best for the country if Yellen stayed on.

For more information on this publication: Please contact the Belfer Communications Office
For Academic Citation: Frankel, Jeffrey.The Next Fed Vice-Chair.” Views on the Economy and the World, November 1, 2017, https://www.belfercenter.org/publication/next-fed-vice-chair.