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CMU Econ Professor Awaits Confirmation To The Fed

Jacquelyn Martin
Marvin Goodfriend is sworn in before testimony at a Senate Banking Committee hearing on his nomination to be a member of the Federal Reserve Board of Governors, Tuesday, Jan. 23, 2018, on Capitol Hill in Washington.

Pittsburgh macroeconomist Marvin Goodfriend is still awaiting official Senate confirmation this week to help lead the nation's central banking system.

President Donald Trump made Goodfriend his latest pick for the largely vacant Federal Reserve Board of Governors. Its members oversee the nation's 12 Federal Banks, set regulations and control the interest rates that private banks and consumers pay to borrow money.

Jay Sukits, professor of business administration at the University of Pittsburgh's Joseph M. Katz Graduate School of Business, said Goodfriend's experience leading one of those Federal Banks in Richmond, Va., should serve him well on the national level.

“That will bring him right into the mainstream of helping to form monetary policy, which I think is a really good thing for the country and for the Fed given his background and sort of his view of how the Fed should operate,” Sukits said.

Under questioning, Goodfriend said Tuesday he supports the Fed's political independence and its dual goals of achieving stable prices and low unemployment. Senate Democrats argued that's not how he felt about the central banking system a few years ago. He won the backing of Republicans who spoke favorably of his conservative views.

Sukits said that's to be expected. He's an academic appointed by a conservative President.

"In other words, I don't think he leans one way or the other in terms of keeping interest rates real low right now or raising them quickly, and I think from that standpoint, he may help sort of mitigate some of the activities of what the Fed does in the future," Sukits said.

During the Senate hearing in Washington, Sen. Pat Toomey (R-Pennsylvania) defended Goodfriend’s admittedly incorrect forecasts about inflation in 2011, saying "no one can be certain that there are not currently asset bubbles in areas like stock prices that could burst and cause real problems for the economy."

Goodfriend is a monetary policy expert and central banking historian at CMU who holds a professorship bearing the name of his late mentor and colleague, Allan H. Meltzer.

The college declined to comment for this story, but in a release, Interim President Farnam Jahanian said the nomination is richly deserved.

"It is a remarkable honor for the entire Carnegie Mellon University community to have one of our own called to public service by the White House,” Farnam said.

If Goodfriend is seated, President Trump will still have three additional vacancies to fill on the seven-member board.

The Senate confirmed attorney and investment manager Jerome Powell as Fed chairman by a vote of 84-13 on Tuesday. The chairmanship is considered the government’s most powerful economic job.

He will succeed Janet Yellen, the first woman to head the Fed, when her term ends Feb. 3. 

The Associated Press contributed to this report.

Megan Harris is a writer, editor, photographer and curator for Pittsburgh's NPR News station. She leads editorial coverage for The Confluence, 90.5 WESA's live, one-hour, daily morning news show.
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