Quarles floats staying at Fed after vice chair stint expires

The Federal Reserve’s vice chairman of supervision said Tuesday he will not leave the central bank before December and floated staying on the Fed board even if President Biden demotes him.

Randal Quarles said in a webcast interview with Politico that he will stay at the Fed through the end of the year despite his term as its regulatory leader expiring in October. Biden is widely expected to nominate a new vice chairman of supervision to replace Quarles, a Republican appointed by former President Trump in 2017.

Quarles said that he would stay at the Fed at least until his term as chairman of the Financial Stability Board, an international panel of central bankers and finance ministers, ends in December. His plans beyond then, however, remain up in the air.

Members of the Fed board, called governors, are appointed by the president, confirmed by the Senate and serve staggered 14-year terms. The president also chooses three governors to serve four-year terms as chair of the Fed board, vice chair of the board and vice chair of supervision.

Quarles’s term as vice chair expires in October, but his term as a Fed governor doesn’t expire until 2032. While Fed officials typically leave the bank after serving as chair or vice chair, Quarles said he may choose to stay even if only as a governor.

“There’s a tradition in our family that people serve out their full terms on the Federal Reserve Board of Governors, even if they’re no longer the chair or the vice chair,” Quarles said, referring to former Fed Chairman Marriner Eccles, his wife’s great-uncle. Eccles chaired the Fed board from 1934 to 1948 and stayed on as a governor through 1951.

“I haven’t decided that yet either. I simply note that there’s a close familiar precedent for it,” Quarles said.

Quarles’s decision could have major implications for a several crucial decisions Biden must make about the future of the Fed. Fed Chairman Jerome Powell’s term leading the central bank expires in February, and Richard Clarida’s vice chairmanship expires in January. 

If Quarles stays, Biden will have one fewer open slot to fill with a Fed governor more in line with his priorities. All but one of the Fed board’s seven seats are currently occupied.