Reagan Picks Kelley for Seat on Fed Board

Edward Kelley, a Houston investment adviser, was nominated Wednesday by President Reagan to serve on the Federal Reserve Board, Administration officials said.

If approved by the Senate, Kelley would fill the seat vacated by Emmett Rice, a Carter Administration appointee who resigned at the end of last year.

A lifelong friend of Treasury Secretary James A. Baker III, Kelley, 54, would join four other Reagan appointees on the seven-member Fed board, which supervises monetary policy and oversees the nation’s banking system.

Administration officials said no decision has been made on a second vacancy on the board created by the departure of Henry Wallich, a Nixon Administration appointee who resigned last year because of ill health. Leif Olsen, the former chief economist of Citibank in New York, is considered the leading candidate for the post, but he has run into substantial internal opposition because of his strongly held views favoring strict control of the money supply.

Kelley’s views on monetary policy are not widely known but he is likely to reflect Baker’s general support for lower interest rates to help stimulate the economy and his conviction that the Fed should limit its regulatory intervention in the banking system.

Kelley, who graduated from Houston’s Rice University and holds an MBA degree from Harvard, is chairman of Investment Advisers and has served as a director of several banks.