Why Obama’s Fed nominees will be confirmed, eventually

Stanley Fischer

Stanley Fischer has longer to wait before taking the No. 2 spot at the Federal Reserve, but Fed-watchers shouldn’t worry about his eventual confirmation for that post by the Senate.

Fischer, who formerly ran the Bank of Israel and was a top official at the International Monetary Fund, was confirmed as a Fed board member by the Senate on Wednesday. The vote was 68 to 27.

He’s now got to go through another vote on his nomination as Fed vice chairman. The timing isn’t decided, but a Senate Democratic aide said it’ll likely be after senators return from their weeklong Memorial Day recess.

There could be protests ahead of that vote from Republicans, like Kentucky Sen. Rand Paul. Paul, who may run for president in 2016, is a longtime Fed opponent whose supporters are critical of the central bank’s quantitative easing.

But any protest won’t have the practical effect of keeping Fischer from becoming the Fed’s No. 2, or slow President Barack Obama’s other Fed nominees. That’s due to the minority party’s inability to block confirmation. All it takes following a Senate rule change last year is 51 votes to confirm most presidential nominees, and Democrats now control 55 seats in the Senate.

The Senate is also expected to act soon on two other nominations for the Fed’s board of governors, Lael Brainard and Jerome Powell. But that won’t be until at earliest the first week in June.
Citigroup’s William Lee and Matthew Dabrowski wrote in a note late Tuesday they expect the new Fed members will be seated by the bank’s June 17-18 meeting.

However, they say objections from Paul aren’t going away any time soon.
Paul’s “prominence on the national stage, particularly on issues of monetary policy, civil liberties and a non-interventionist foreign policy, means he will remain a fixture in the debate for the next three years.”
Fischer’s confirmation brings the Fed board closer to its full membership of seven. #Obama will still have two spots on the board to fill if Brainard is confirmed and Powell is reconfirmed for a second term. Market Watch