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Senate Banking Committee approves Federal Reserve nominations

Richard Clarida, vice chairman nominee for the Fed
Richard Clarida, vice chairman nominee for the Federal Reserve, speaks during a Senate Banking Committee confirmation hearing last month.

The Senate Banking Committee advanced the nominations on Tuesday of Richard Clarida and Michelle Bowman to serve on the Federal Reserve Board of Governors.

Mr. Clarida, if approved by the full Senate, will serve as the board's vice chairman. The White House nominated both last month.

The committee voted 20-5 in favor of Mr. Clarida's nomination and 18-7 in favor of Ms. Bowman. Their nominations will now head to the full Senate for a vote that has yet to be scheduled.

Sen. Mike Crapo, R-Idaho, chairman of the Senate Banking Committee, said both nominees are well qualified, adding, "their expertise and experience will be an asset for the Federal Reserve."

Sen. Sherrod Brown, D-Ohio, ranking member on the committee, voted against both nominees after an opening statement in which he said past Federal Reserve Board of Governors nominees Allan Landon and Kathryn Dominguez were not given a hearing last Congress. "Because of this, President Trump will have the ability to nominate six of the seven Fed governors to 14-year terms."

Currently, the board has three members, Mr. Crapo noted.

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.

Ms. Bowman was nominated as a Fed governor representing the interests of community banks to complete the remainder of a term that expires in January 2020. In 2014, Congress passed legislation that requires the Federal Reserve Board of Governors to have at least one member with community bank or community bank supervision experience. Mr. Landon was nominated to fill the seat in 2015 but didn't receive a hearing. Ms. Bowman currently serves as the Kansas state bank commissioner and previously served as an executive at Farmers & Drovers Bank.

Both Mr. Clarida and Ms. Bowman will potentially join the Fed as it pursues a gradual series of interest rate hikes and a reduction in its bond holdings. Chairman Jerome Powell took the helm of the central bank in February. The Fed is expected to raise interest rates for the second time this year on Wednesday.