Elizabeth Duke, a holdover appointee from George W. Bush’s second term, announced today that she’s resigning from the Federal Reserve’s Board of Governors. Her term actually expired more than a year ago, but no replacement for her had been nominated and legally speaking Fed Board members can stick around until there’s a replacement in the chair. But today she said she wants out.
This should not have any dramatic implications for monetary policy, but Duke was one of the regulatory specialists on the Fed board and took a point-woman role on housing issues. Obama’s pattern with the Fed has been to be extremely slow in filling vacancies (a huge failing, especially early in his administration) and then to fill them with well-regarded academic economists who generally don’t have much of a track record of clearly stated views on monetary policy controversies. Obama always could break with that and try to make an impact appointment by nominating someone like a Christina Romer or an Adam Posen, whose confirmation would immediately count as a signal of looser policy. On the other hand, getting such a nominee confirmed by the Senate would be more challenging.