The two newest members of the Federal Reserve took their seats last month, giving the Board of Governors its full complement of seven.
Kevin Warsh, who at 35 is the youngest governor in the history of the Fed, and Randall Kroszner, 43, are the newest faces at the nation's central bank. But they are not the last. President Bush will have the opportunity to name two others with the departure of vice chairman Roger Ferguson, the sole Democrat, and Philadelphia Federal Reserve president Anthony Santomero.
It is only the third time in history that one president has had the chance to name all seven governors on the panel that determines the course of interest rates for investors both large and small. And investors are cautiously watching any change in the Fed these days following the departure of chairman Alan Greenspan after 18 years.
Warsh, a graduate of Harvard law school, was the special assistant to the president for economic policy and executive secretary of the National Economic Council. Before joining the administration, he worked on mergers and acquisitions for Morgan Stanley in New York. His appointment caused consternation among some money managers questioning his experience.
“Kevin Warsh is not a good idea,” former Fed vice chairman, Preston Martin told Bloomberg News.
Kroszner is a University of Chicago professor with a doctorate in economics from Harvard. He is well-known for his expertise in banking regulation. He told the banking committee that “long-run price stability is crucial to achieving maximum employment and overall economic stability.”