The Headaches a Three-Person Fed Board Would Face

  • Suddenly two people deliberating will constitute a meeting
  • More practical concern is that committees will be understaffed

Yellen Says She Intends to Serve Out Term as Chair

As of October, the Federal Reserve’s politically-appointed Board of Governors could well be down to three members: Vice Chairman Stanley Fischer is leaving, and the full Senate has yet to confirm White House nominee Randal Quarles as the new vice chair for supervision.

If the Washington openings climb to four -- a historical anomaly -- it’ll create a potential inconvenience for the remaining governors. For one, they have fewer people to staff committees (there are a bunch of them) and oversee central bank business. They’ll also now have a quorum at only two governors, instead of the current three. That means any deliberation two governors have on official business would be need to be made public under the so-called Sunshine Act. The law seeks to inform the public anytime decisions are being pondered by at least the number of agency members required to take action, though it includes exemptions for matters including personnel decisions and certain market-sensitive issues.

Fortunately for hold-outs Lael Brainard, Jerome Powell and Chair Janet Yellen, bumping into one another on the elevator and making casual conversation doesn’t count.

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