Richard Clarida will be nominated to serve as vice chairman of the Federal Reserve Board of Governors, the White House announced Monday.
Mr. Clarida, an economist and global strategic adviser with Pacific Investment Management Co., is the current C. Lowell Harriss Professor of Economics and International Affairs at Columbia University, where he has taught since 1988. He served as a senior staff economist with President Ronald Reagan's Council of Economic Advisers, and assistant secretary for economic policy at the Treasury Department under President George W. Bush. He would fill the remainder of a term for Stanley Fischer, who stepped down as vice chairman in October. The term expires in February 2022.
Also, Kansas State Bank Commissioner Michelle Bowman will be nominated as a Fed governor representing the interests of community banks, the White House said.
The White also said that President Donald Trump will nominate Dan Michael Berkovitz to serve as a Commodity Futures Trading Commission commissioner for the remainder of a five year term expiring April 2023. Mr. Berkovitz is a partner and co-chair of the futures and derivatives practice at the law firm of WilmerHale. From 2009 to 2013, he served as general counsel of the CFTC and was the agency's deputy representative to the Financial Stability Oversight Council. He has also served as a senior staff lawyer for the Senate Permanent Subcommittee on Investigations.
The Senate will have to vote on both nominations.
If confirmed, Mr. Clarida would bring a mix of skills to the job of the central bank's No. 2 alongside Chairman Jerome Powell.
"I would describe him as centrist and pragmatic," said New York University professor Mark Gertler, who has co-written a number of research papers with Mr. Clarida. "He has a nice balance between understanding and contributing to what the academic literature has to say and very practical, real world knowledge."
Mr. Clarida will join the Fed as it pursues a gradual series of interest rate hikes and a reduction in its bond holdings under the auspices of Mr. Powell, who took the helm of the U.S. central bank in February. Mr. Powell said in a speech earlier this month that the outlook for inflation and employment support further gradual interest-rate increases.
The vice chairman plays a critical support role for the central bank's leader, and often heads special projects at the request of the chair. Along with the president of the New York Fed, who acts as the central bank's eyes and ears on Wall Street, the deputy typically forms a key voting bloc with the chairman on both policy and strategy.
Mr. Clarida "is just what Jay needs," said Timothy Adams, president of the Washington-based Institute of International Finance, referring to Mr. Powell by his nickname. "He's well respected in the financial industry, well respected in academia and has got a team mentality."
Since 2014, Mr. Clarida has led PIMCO's annual secular forum that brings in former policymakers and other high-powered outsiders to help the firm decide how to manage its $1.75 trillion in assets.
He was an early progenitor of the so-called "new neutral" concept championed by PIMCO that argues that equilibrium global interest rates — ones that neither spur nor stifle economic growth — are significantly lower than they were in the past.
In a Dec. 13 Bloomberg Television interview, he reckoned that rate in the U.S. is now closer to 2% than to 3%. Fed policymakers, in contrast, peg the neutral rate at 2.9%, according to the median projection of officials in March.
He saw a chance in that interview that the Fed could raise interest rates four times this year and that inflation could eventually overshoot the central bank's 2% target, though he said that was not his base case.
Bloomberg contributed to this story.