Kansas City Fed names ex-bank executive as new president
Add Axios as your preferred source to
see more of our stories on Google.
Photo courtesy of the Federal Reserve Bank of Kansas City
Jeffrey Schmid, a former bank executive, will be the next president of the Federal Reserve Bank of Kansas City, the regional Fed bank said on Wednesday — ending an unusually lengthy search for a new leader.
Why it matters: Schmid succeeds Esther George, who retired earlier this year after 12 years as its leader. He will become a member of the rotating group of Fed presidents that vote on critical interest rate decisions.
The intrigue: The announcement of the Kansas City Fed's new leader comes just weeks before it's set to host an annual gathering of influential economists and policymakers in Jackson Hole, Wyoming.
- Schmid will officially take up the post on Aug. 21, days before the Jackson Hole conference begins.
- The search has been underway since last May, when George initially announced plans to retire.
What they're saying: "Jeff's perspective as a native Nebraskan, his broad experience in banking, and his deep roots in our region will be an incredible asset to the Federal Reserve, both as a leader of the organization and in his role as a monetary policymaker," María Griego-Raby, a Kansas City board member who led the search committee, said in a release.
Details: Schmid is currently the president of the Dallas-based Southwestern Graduate School of Banking at Southern Methodist University. He served as the CEO of Mutual of Omaha Bank for 12 years before the community bank's acquisition.
- Notably, Schmid began his career in Kansas City as a Federal Deposit Insurance Corporation bank examiner.
- It continues a tradition at the Kansas City Fed of appointing banking experts as its leader; both George and her predecessor Tom Hoenig had backgrounds in bank supervision.
- Schmid will not be a voting member of the Federal Open Market Committee, which sets interest rate policy, until 2025, but will participate in the meetings beginning in September.
Besides the usual responsibilities for a reserve bank president — voting on monetary policy, representing the Fed in their community and overseeing a large, complex operation — the Kansas City president has some unique responsibilities.
- In deciding the topics, papers and guest list of the Jackson Hole symposium, the Kansas City Fed plays an outsized role in major economic debates.
- Its district includes Wyoming, home to many crypto-focused companies, which has put the bank — controversially — at the center of debates over whether to allow those institutions access to the Fed's financial infrastructure.
Flashback: George was subject to mandatory rules that require Fed presidents to retire when they turn 65.
- In a rare dissent since the Fed began its current rate-hiking campaign, George last year publicly opposed the Fed's decision to undertake outsized rate increases to battle inflation.
- George preferred instead to raise rates by a smaller increment, pointing out that policy would impact "traditional bank lending models, such as those prevalent among community banks."
