Fed’s Geithner Leaves Rate Panel, Replaced by Cumming
Federal Reserve Bank of New York President Timothy Geithner, the nominee for Treasury secretary, is leaving the central bank’s committee that sets the benchmark U.S. interest rate.
Christine Cumming, the New York Fed’s first vice president, will attend the Federal Open Market Committee’s Dec. 15-16 meeting in Geithner’s place, bank spokesman Calvin Mitchell said in an e-mail. The New York Fed president serves as vice chairman of the FOMC.
Leaving the FOMC would help Geithner avoid a conflict of interest or the appearance of one as he prepares to join President-elect Barack Obama’s administration. Presidents Bill Clinton and George W. Bush took a hands-off approach to the Fed’s monetary policy, and Obama has indicated he will do the same.
Departing Fed governors and district-bank presidents often skip their final FOMC meeting. Geithner, 47, hasn’t said when he will leave his post as chief of the bank since Obama picked him for Treasury secretary last week.
Cumming, 56, who has worked at the Fed for three decades, is the No. 2-ranking official and designated alternate for Geithner at FOMC meetings in Washington payday loan.
She substituted for Geithner at the Sept. 16 FOMC meeting, when policy makers voted to leave the benchmark rate at 2 percent. Geithner stayed in New York as officials negotiated the $85 billion bailout of insurer American International Group Inc.
Before her promotion to first vice president in 2004, Cumming served as the bank’s research director for four years. She also has experience in bank supervision, serving as a senior vice president in that division of the Fed from 1994 to 1999. She began her career at the central bank as an international economist in 1979.
Economists have said Cumming is unlikely to be a permanent replacement for Geithner as president. Instead, Chairman Ben S. Bernanke may turn to Fed Governor Kevin Warsh or New York Fed markets chief William Dudley, who have been closely involved in efforts to combat the financial crisis, Fed watchers say.