Blinder Expected to Announce His Fed Resignation

Federal Reserve Board Vice Chairman Alan Blinder is expected to announce today that he is stepping down as the No. 2 man at the powerful central bank, Clinton administration sources said Tuesday.

During his 1 1/2-year stint at the Fed, Blinder has played a key role in shaping interest rate policy and has led a drive to make the central bank more open.

Blinder is expected to return to Princeton University, where he spent more than 20 years teaching economics before coming to Washington in 1993 to serve first in the Clinton administration and then at the Fed.

Another economics professor, Benjamin Friedman of Harvard, is considered a leading candidate to replace Blinder, a source close to the Fed said, although it was not clear whether the administration has made a decision.

Blinder replaced David Mullins as vice chairman in June 1994 after the the latter left for an investment management company. Blinder’s term as a policymaker was due to expire at the end of this month.

White House spokesman Mike McCurry declined to comment on the reports.