Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, will retire after eight years in which he became a consistent critic of the central bank's unprecedented easing.
Plosser, 66, will step down on March 1, the reserve bank said today in a statement. The bank's Chairman James Nevels, founder of The Swarthmore Group, and Deputy Chairman Michael Angelakis, chief financial officer of Comcast Corp., will lead a search committee to find a successor.
Plosser has warned since the Fed cut the main rate to near zero in December 2008 that too much accommodation risks an inflationary surge. He cast a dissenting vote at the last two Federal Open Market Committee meetings. Inflation has been tame, with a main price gauge remaining below the central bank's 2 percent objective for more than two years.
"It could be a loss for that more hawkish group," said Dean Croushore, an economics professor at the University of Richmond in Virginia and a visiting scholar at the Philadelphia Fed, where he was a vice president and economist from 1989 to 2003. "He's a pretty powerful proponent of that sort of view, and people respect him for that."
Dallas Fed President Richard Fisher, another policy critic who joined Plosser in his dissent at the last meeting, also has said he plans to step down next year. The Philadelphia and Dallas reserve banks get their next policy votes in 2017.
"The search committee will look at a broad, diverse group of candidates from inside and outside the Federal Reserve System," Angelakis said in the statement. "We will seek individuals who have the economic and leadership experience to be an effective policy maker and the chief executive of the bank."
Plosser has said the Fed should be signaling that rate increases may come sooner rather than later.
"I would rather us get started raising rates sooner and raise them more gradually than put them off and have to raise them very quickly," Plosser said in a Bloomberg Radio interview Aug. 22 from the central bank's annual symposium in in Jackson Hole, Wyoming. "If the Fed waits too long it risks triggering inflation and disrupting financial markets."
