30th November 2017

By Steven K. Beckner

President Trump's nomination of Marvin Goodfriend to the Federal Reserve Board of Governor fills a glaring need. With Fed Governor Jerome Powell, a non-economist, set to succeed Janet Yellen as Fed Chairman in February (assuming he's confirmed) and with Stanley Fischer having retired as vice chairman, Goodfriend will bring much-needed expertise in monetary economics to the Board and to the Federal Open Market Committee. The Carnegie Mellon University professor has plenty of FOMC experience, having served as director of research at the Richmond Federal Reserve Bank from 1993 to 2005. A free market economist and close associate of the late Allan Meltzer, the 67-year-old Goodfriend is a brilliant thinker on monetary policy. Long before the financial crisis, Goodfriend pioneered thinking about how the Fed could provide stimulus at the zero lower bound. He was a leading proponent of paying interest on reserves to facilitate the use of quantitative easing. Though he's a member of the Shadow Open Market Committee, Goodfriend has been branded by some as "dovish." That is mistaken. He could just as easily prove hawkish depending on what the data dictate, and he can be expected to vote independently of what the Trump administration might desire.