The monthslong search to fill two empty seats on the Federal Reserve’s board of governors will carry on.
Lecturer at the Yale School of Management and Brookings Institution economist Nellie Liang withdrew her nomination to the board — which oversees the country’s central banking system — on Monday, according to the White House. Liang was nominated by President Donald Trump to fill one of the vacancies last September.
“We regret to announce that today Nellie Liang notified us that she has withdrawn from nomination to the Federal Reserve Board of Governors,” said Lindsay Walters, a spokesperson for the White House, in an announcement on Monday. “We supported her nomination and believe she would have made a good Governor.”
Liang has a long and distinguished vita in economics, with a prolific academic record to boot. Prior to joining Brookings as a senior fellow in 2017, she worked as director of the Federal Reserve’s Division of Financial Stability for the previous seven years. In addition to teaching a macroprudential policy course at Yale, she has worked as a consultant at the International Monetary Fund and served as a member of the Congressional Budget Office’s Panel of Economic Advisers. Before leading the Division of Financial Stability, Liang worked as an economist in the Federal Reserve Board’s research division. Throughout her decadeslong career, she has, among other credentials, researched financial stability and credit markets. If Liang had been confirmed, she would have been the first Asian-American to work in that capacity.
In an email to the News, Liang explained her reasons for exiting stage left at this point in the confirmation process.
“I have decided to withdraw my name from consideration to be a member of the Board of Governors of the Federal Reserve because the likelihood of a prolonged process could have left me in professional limbo for too long,” Liang wrote on Jan. 7.
Liang emphasized her respect for the central bank and its leaders. She told the News that she looks forward to continuing her contributions as an outside researcher.
Liang’s nomination was met with immediate skepticism by some conservatives, who saw the economist as more friendly to regulations than to business. Last October, a former Republican staffer on Capitol Hill and an alumnus of the more recent Bush White House Jared Whitley asked in the Washington Examiner whether Liang was “the first nomination of the Elizabeth Warren administration.” That same month, The Intercept reported that Republican members of the Senate committee on banking — which is responsible for considering nominations to the Fed’s board of governors — expressed ambivalence and concerns about the nominee’s positions.
Liang is an atypically centrist nominee for the Trump administration, whose work reflects the mainstream economic consensus. In September, at the time of Liang’s nomination, there were three seats open on the board. One of these openings was filled by the confirmation of Michelle Bowman, a Kansas banking commissioner, in November. Before entering banking, Bowman formerly worked for the second Bush administration and Sen. Bob Dole, R-Kansas.
Jerome Powell, the chairman of the board, has reportedly worked to support Liang’s nomination by reaching out to Senate Republicans. In the Senate, resistance to Trump’s Federal Reserve nominees extends beyond Liang. Marvin Goodfriend, a professor of economics at Carnegie Mellon University, has been left in limbo since January 2018. Prominent Republican senators, such as Rand Paul, R-Kentucky, have voiced opposition to his confirmation. No Democrats have since come to Goodfriend’s aid.
Uncertainty is the watchword inside the beltway as nearly a third of the seats on the Fed board are up in the classifieds.
The empty spots are diagnostic of the wider challenges the Trump administration has faced in filling seats, an issue complicated by fractured political dynamics and few coordinated nominations.
William English, a professor at the School of Management, worked closely with Liang at the Federal Reserve. English was formerly the board’s director of the Division of Monetary Affairs and secretary to the Federal Open Market Committee. In an email to the News on Jan. 9, English praised Liang.
“I don’t know the reasons for Nellie’s withdrawal, but I am sorry that she will not be a governor,” wrote English. “She is very smart, and has a lot of knowledge about financial markets and financial stability. She would have made a real contribution to the work of the Board.”
The Federal Reserve System was introduced in 1913.
Keshav Raghavan | email@example.com .