On Wednesday evening, President Trump moved to fill another vacancy at the Fed, nominating Professor Marvin Goodfriend for a position in the Federal Reserve Board of Governors. A professor of Economics at Carnegie Mellon University, Goodfriend previously served as Director of Research at the Federal Reserve Bank of Richmond from 1993 to 2005. He also worked as an economic adviser under President Ronald Reagan.
Goodfriend’s nomination comes amidst a turbulent time for the Fed. Early this month, President Trump nominated Jerome Powell to succeed current Fed Chair Janet Yellen, after which Yellen announced she would be resigning her position on the Fed’s board of governors as well. Goodfriend’s nomination, if approved, will help ensure the Fed’s governing board maintains a quorum. Goodfriend would be taking over a seat vacated in 2014 by former Fed Governor Sarah Bloom Raskin.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) called Goodfriend “a highly respected researcher on monetary and macroeconomics and an impeccable conservative.” He added, “[Goodfriend] understands that consulting monetary policy rules can provide both instructive guidance for the Fed and transparency for the public.”
Those on the other side of the aisle have been more critical of Goodfriend. In October, a coalition of progressive groups petitioned Senators not to confirm Goodfriend, claiming that he would work to “undo the progress that the Fed has made under Yellen."
Goodfriend has criticized several of the Fed’s policies in the aftermath of the 2008 financial crisis, including the purchase of mortgage-backed securities. He wants more congressional oversight of the Fed and its practices, including the Fed’s two percent inflation target and the reference rule. However, he has also written about the “benefits of negative interest rates … as a way to give central banks more flexibility to combat crises, rather than having to resort to unconventional means like bond buying after rates are cut to zero.”