President Barack Obama’s decision to nominate Stanley Fischer as the No. 2 at the Federal Reserve was prompted by none other than Janet Yellen.
As senior White House officials were putting together a list of potential vice chairman candidates last year, they concluded there was no way Fischer, a former Bank of Israel governor who had come close to being on the short list for the Fed chairmanship, would want the deputy’s job, according to a person familiar with the decision process. They decided they wouldn’t bother asking.
Then they got a call from Yellen.
Yellen, who was confirmed as Fed chairman this week, enthusiastically told a group of Obama’s senior aides that not only did she want Fischer at the Fed, she had already reached out to him and sold him on the idea, according to the person, who asked for anonymity to discuss the private conversations.
With that information, Obama’s aides contacted Fischer.
The former Massachusetts Institute of Technology economics professor, who taught departing Fed Chairman Ben S. Bernanke, told White House officials he was moved by Yellen’s impassioned pitch and was sold on it in large part because it was her idea, the person said. Administration officials were also impressed that Yellen would want a person with Fischer’s extensive resume and reputation as her vice chairman, the person said.
Michelle Smith, a Fed spokeswoman, declined to comment.
The Fed’s No. 2 has traditionally been the chairman’s most important ally on the board and is given a significant assignment. Obama recognized that the Yellen and Fischer would make a strong team at the U.S. central bank, the person said.
The vetting process took longer than usual because of Fischer’s dual Israeli and U.S. citizenship, the person said.
The White House announced today Obama will nominate Fischer, 70, to replace Yellen as vice chairman. It also announced that Lael Brainard, formerly the U.S. Treasury Department’s top international official, will fill an empty seat on the board, and Jerome Powell is being nominated for a second term.
Fischer “is widely acknowledged as one of the world’s leading and most experienced economic policy minds, and I’m grateful he has agreed to take on this new role,” Obama said in the statement. “I am confident that he and Janet Yellen will make a great team.”