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Chicago Fed's president confirms that he will retire

January 23, 2007|From Bloomberg News

Federal Reserve Bank of Chicago President Michael H. Moskow, whose inflation warnings have raised bond yields, confirmed Monday that he would retire Aug. 31, leaving a fourth high-level opening at the central bank.

The Chicago Fed will begin a nationwide search for a successor, the bank said in a statement, reiterating a 2002 resolution extending Moskow's retirement date until this year. Moskow took office in 1994 and has never dissented from the majority in a vote on interest rates.

The departure is part of a year of turnover at the central bank. On Jan. 11, Boston Fed President Cathy Minehan announced plans to retire, and a search continues to replace Atlanta Fed President Jack Guynn, who left in October. In addition, the Federal Reserve board of governors has one vacancy.

Moskow "has been vigilant against inflation and always talks about that," said William Curt Hunter, a former Chicago Fed research director and now dean of the University of Iowa's business school. "He is mildly hawkish but at the same time focuses on maximum sustainable growth."

Moskow was the most influential Fed official after Chairman Ben S. Bernanke in prompting bond-market swings in the first half of 2006, according to Macroeconomic Advisers economists Laurence Meyer, a former Fed governor, and Brian Sack.

The 12-member Federal Open Market Committee, which sets rates, includes seven Fed governors, the head of the New York Fed and four rotating members from among the presidents of the 11 other regional Fed banks. Members currently are Moskow, Minehan, Thomas Hoenig of Kansas City and William Poole of St. Louis.

In a statement, Bernanke said that Moskow made "invaluable contributions" and "we will miss his thoughtful insights, his leadership and expertise on a wide range of banking and monetary issues."

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