In early April, the Federal Reserve Bank of New York named John C. Williams as its president. Williams will occupy a position that is generally held to be one of the most influential across the Federal Reserve. The head of the New York branch is in charge of overseeing the trading desk responsible for setting the key funds rate, the benchmark for many different kinds of consumer and bank debt. The right to oversee this rate comes as part of the Fed president's permanent voting status on the Federal Open Market Committee, as its vice chairman. The regional branch's decisions weigh heavily in crafting monetary policy, and it oversees many of the largest financial institutions in the world.
By selecting Williams as the next president of the Federal Reserve of New York, the search committee has disappointed those who pushed for a more diverse candidate, which they hoped would bring a fresher perspective. The president of a regional Fed branch is selected through a closed-door process, the precise inner workings of which are unclear to everyone except those who are intimately involved, to the chagrin of onlookers.
Those in favor of Williams's selection argue that his experience leading the San Francisco Federal Reserve renders him amply qualified -- as does the fact that he has spent almost the entirety of his career within the Federal system. Furthermore, they point to his expertise in monetary policy, his varied experience working with progressives and conservatives alike, his community engagement in San Francisco, and his experience diversifying the senior leadership in the San Francisco branch. Above all, expert witnesses have stated that finding someone with ample practical experience was top priority, given the comparative lack of such experience among those in the top ranks of the Fed. Other priorities include finding a candidate who can understand the nuances of the Fed's inner workings and protect its independence. On the flip side, a longtime Fed insider in the leadership role can run the risk of amplifying the effects of groupthink, resulting in significant oversights, such as the housing bubble of the mid-2000s.
Williams's comparative lack of experience in the financial markets does leave room for some to question his ability to communicate the Fed's decisions to Wall Street, or make sense of the reactions of the financial markets to Fed policymakers. Plenty are eager to protest against Williams's candidacy precisely due to his stances on Wall Street regulation, which they believe call into question Williams's ability to lead the Fed on a path in alignment with public interest.