2 Nominated to Fill Openings at Federal Reserve

President Clinton on Thursday nominated a Michigan economist and a New York banking consultant to fill vacancies on the Federal Reserve Board.

If confirmed by the Senate, the appointments of Edward M. Gramlich, 58, and Roger W. Ferguson Jr., 45, would bring the seven-member board to full strength.

The panel oversees the Federal Reserve System, which determines interest rates for millions of American consumers and businesses and regulates the nation’s largest banking companies, and therefore the nation’s economy.

Gramlich, dean of the school of public policy at the University of Michigan, would fill the position left by Janet Yellen, who resigned to become chairwoman of the White House Council of Economic Advisors. The term runs through Jan. 31, 2008.

Ferguson, a partner and director of research and information systems at McKinsey & Co., would fill the seat vacated by Bush administration appointee Lawrence Lindsey. It expires Jan. 31, 2000. Ferguson would become the third black member to serve on the board and the first since the 1986 resignation of a Jimmy Carter appointee, Emmett J. Rice.

Senate Banking Committee Chairman Alfonse M. D’Amato (R-N.Y.) promised to move on the nominations “with all due dispatch.” But he said he did not know if there is time before the Senate’s August recess.

“I know of no reason why they would not be qualified, so that’s a pretty good start,” he said. “I know of nothing that would impede them, but we have to do the process.”

Neither nominee has a particular background in monetary policy, but colleagues have said in interviews that they expected they would fit well with the moderate, mainstream views of the other board members.

“We looked for people who would have a sound, pragmatic view on monetary policy and would bring sound and reasonable judgment to those decisions. There were certainly no litmus tests,” said Gene Sperling, the White House’s economic policy coordinator.

Economist Alan Levenson of Aubrey G. Lanston & Co. in New York said Ferguson’s views on interest rate policy are “a total mystery.” He said Gramlich’s writings suggest he would lean toward keeping interest rates low as long as Congress and the administration continued to cut the budget deficit.

“I think he’s a little to the dovish side of neutral,” he said.

In April, administration officials had said Gramlich and Ferguson were Clinton’s choices, pending a final screening process.

Along with Fed Chairman Alan Greenspan, they would join GOP-appointed holdovers Edward Kelley and Susan Phillips and two other Clinton appointees, Vice Chairwoman Alice Rivlin and Laurence Meyer.

Gramlich was acting director of the Congressional Budget Office in 1986 and 1987. Most recently, he served as chairman of a 13-member advisory commission on Social Security.

Ferguson, who earned a law degree and a doctorate in economics from Harvard University, was an attorney at a Wall Street law firm before joining McKinsey in 1984.