A new face is coming to the Federal Reserve’s top brass, as the central bank’s outpost in Boston announced that economist Susan Collins will be taking on the top job as president.
As one of 12 regional heads that vote on the direction of the Fed’s powerful economic policies, Collins will assume a critical role as high levels of inflation and concerns over the ongoing pandemic weigh on the U.S. economy.
Collins will be the first Black woman to helm a Federal Reserve Bank, and is only the second Black person to do so (after Raphael Bostic, who began running the Atlanta Fed in 2017).
Collins, a Ph.D-trained economist with degrees from Harvard and the Massachusetts Institute of Technology, is currently provost and executive vice president for academic affairs at the University of Michigan.
The leadership change comes months after a trading scandal within the central bank that engulfed then-Boston Fed President Eric Rosengren. Despite his public warnings of contagion in real estate markets during the pandemic, Rosengren made multiple large transactions in real estate investment trusts (REITs) and other securities during 2020. Bloomberg originally reported the news.
Rosengren stepped down from his role on Sept. 30, citing the “worsening of a kidney condition.”
[Read: A timeline of the Federal Reserve’s trading scandal]
The bank’s first vice president, Kenneth Montgomery, has served as interim president and will continue to do so until Collins begins her tenure on July 1.
“I look forward to helping the Bank and System pursue the Fed’s dual mandate from Congress — achieving price stability and maximum employment,” Collins said in a statement.
Collins is a familiar face for the Federal Reserve, having served for nine years as a director at the Chicago Fed. She has also been inside Fed circles, commonly speaking at Fed-organized events.
At a 2019 conference, Collins told Yahoo Finance that the Fed needs to be adaptable. She supported efforts to periodically revisit the Fed’s framework for policy as the economy evolves.
“When things are strong is when you really need to make sure your roof isn’t leaking,” University of Michigan professor of public policy Susan Collins told Yahoo Finance in June 2019.
Collins said at the time she would have liked to see the Fed tolerate moderately higher inflation during recoveries, to allow easier monetary policy to bring more workers off of the sidelines. She supported an informal proposal to raise the Fed’s inflation target from 2% to 3%, although the Fed made it clear it was not looking to change the target.
The Fed president role does not require Senate confirmation given the reserve banks’ pseudo-private structure.
Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.
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