Bush Fed chief pick may come as early as November

11 Oct, 2005

With the White House promising a decision soon on a successor to Federal Reserve Chairman Alan Greenspan, analysts view early November to mid-December as a likely time window for an announcement.
A small group of senior White House officials has been quietly but intensively focusing on the search for months, people close to the process say.
White House spokesman Scott McClellan said on Friday a decision will be made "as soon as possible," but declined to give specifics.
Greenspan's 18-year tenure at the Fed runs out on January 31. Although he could stay longer if a successor is not in place, the Fed chief has signalled he prefers to leave on time.
"It should be pretty soon. (Bush) doesn't have a lot of time and he doesn't want a surprise," said Arthur Laffer of the economic consulting firm Laffer Associates.
Some analysts see an October decision as an outside possibility but many discounted that after Bush said last week he had yet to see a list of candidates.
Many experts view November as preferable to December because it would give Wall Street more time to absorb the transition, and even a November announcement would leave a tight timetable for the Senate to confirm the pick.
"I think the domestic and foreign capital markets will become increasingly unsettled the longer the administration waits," said economist David Jones, author of several books on the Fed.
Bush's nomination of White House counsel Harriet Miers to the Supreme Court is one factor that may affect the timing of an announcement. Bush wants to win Senate approval for Miers before the late-November Thanksgiving holiday and may be reluctant to offer a Fed pick while that effort is ongoing.
"The fall political calendar is extremely crowded for the administration," said Nicholas Checa, managing director of Kissinger McLarty Associates. "I think a window of opportunity opens up for the administration to either announce or float names after the December 13" meeting of Fed policy-makers.
Checa said the White House wanted to avoid naming a new Fed chief before the mid-December meeting on interest rates out of concern it could undercut Greenspan in his final months. But William Niskanen, chairman of the Cato Institute think tank, said he did not think that would be a factor. "I don't think Bush will wait that long," he said.
Checa said another issue that may consume Bush's time is a possible retooling of his economic team. Speculation has been rife in Washington that US Treasury Secretary John Snow may step down before the year's end and that Bush may want to move White House Chief of Staff Andrew Card to Treasury.
Even if there are no changes to the economic team, Bush's November calendar is busy. He is heading to Latin America early in the month and is also expected to visit Asia.
Three potential candidates are regularly mentioned for the Fed chairman job: Glenn Hubbard, a past adviser to Bush; Harvard economist Martin Feldstein; and Fed governor-turned White House adviser Ben Bernanke.
Other potential contenders include former Bush economic aide and ex-Federal Reserve Governor Lawrence Lindsey; Fed Governor Donald Kohn; Fed Vice Chairman Roger Ferguson; and ex-Dallas Fed President Robert McTeer.
Most of the candidates are Republicans. But Kohn is a political independent and Ferguson a moderate Democrat. Some allies close to the White House said that for the most part politics won't be the paramount factor in the decision.
"Even among conservatives, there's two or three different kinds of economic philosophy," said Republican political strategist Charles Black.

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