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Dallas Fed appoints first female president to succeed Rob Kaplan

By Natalie Walters

Federal Reserve Bank of New York executive Lorie Logan will become the 13th president of the Dallas Fed and its first female chief following a seven-month search.

She will oversee the regional bank’s 1,200 employees and represent the Fed’s Eleventh District on the Federal Open Market Committee that formulates U.S. monetary policy. The district covers Texas, northern Louisiana and southern New Mexico. Her start date is Aug. 22.

Logan replaces Rob Kaplan, who served as Dallas Fed president from September 2015 until his retirement in October amid a stock trading controversy involving several regional bank presidents.

The announcement comes a week after 22 Democratic members of Congress urged the Dallas Fed to appoint the first Latino regional president to fill the position. There are currently three people of color among the leaders of the 12 regional Fed banks, including the Boston Fed’s recent appointee, Susan Collins, who starts July 1.

“Our committee conducted a nationwide search and identified a diverse pool of outstanding candidates from a variety of backgrounds and professions,” said Thomas Falk and Claudia Aguirre, co-chairs of the Dallas Fed search committee. “Lorie is a seasoned leader, who will bring a wealth of experience leading complex businesses and managing multi-functional teams.”

While Logan isn’t a Latino, her appointment means the 12-district Fed is one shy of gender parity among its leaders. Five of the 12 regional bank chiefs are women, including Collins, who is also the first Black female regional Fed president. The first time a woman was appointed a regional chief was in 1982, 69 years after the Fed was started.

“Lorie is a trusted colleague and dedicated public servant whose remarkable skill and experience with complex financial markets has informed our decisions and helped implement monetary policy to support the U.S. economy,” said Fed chair Jerome Powell in a statement.

Logan, 49, is joining at a critical time as the Fed implements a series of interest rate hikes aimed at bringing inflation back to a 2% target. In a speech on Tuesday, President Joe Biden said inflation is his top concern.

“While I will never interfere with the Fed’s judgments or tell them what to do, I believe inflation is our top economic challenge right now and I think they do, too,” Biden said. “The Fed should do its job, and will do its job, with that in mind.”

While all regional Fed presidents are on its open market committee, which makes decisions on when to raise rates, they rotate as voting members based on one-year terms. Logan will be a voting member next year.

This will be Logan’s first policy-making role, having previously focused on implementing policies. She serves as an executive vice president of the New York Fed’s Markets Group, manager of the System Open Market Account and head of Market Operations Monitoring and Analysis.

The New York Fed is the top regional bank in the system, charged with executing open-market transactions on behalf of the Reserve banks. Its regional president is the only one to maintain a position on the open market committee rather than rotating out.

Logan takes orders from the FOMC on buying or selling securities to control the money supply. It’s a $9 trillion securities portfolio, making it the largest asset on the Fed’s balance sheet. She also briefs top officials at policy meetings. The Wall Street Journal called her position “the most high-profile staff job” in the Federal Reserve System.

Richard Fisher, Dallas Fed president from 2005 to 2015, said Logan is a great choice. While she hasn’t been a policymaker before, she has had an influence on those decisions, he said. Fisher said he doesn’t like the term “hawk” but thinks she will be “a wise owl.”

“She’s very experienced, uber-smart and given that her position is a key position in the Federal Reserve system, it’s a real feather in the Dallas Fed’s cap,” Fisher said.

Fisher said political pressure, such as the letter from Congressional Democrats, doesn’t work on the Federal Reserve banks because the presidents aren’t political appointees.

“Political pressure on the banks tends to actually backfire,” he said. “These are really private banks that operate a system for the federal reserve and political pressure should never be applied to them.”

Fisher said he would like to see Latino members appointed to the Board of Governors in Washington, D.C., which are political appointees. The board is the Fed’s main governing body, with members appointed by the president and confirmed by the Senate. The seven-member board has three Republican members, two Democratic members and two vacancies. It has one person of color, economist Lisa Cook, who was confirmed by the Senate on Tuesday.

Logan has been at the New York Fed since 1999 and helped to develop its crisis-related activities, including responses following the 9/11 attack and the 2008 recession.

“At that time, I really learned what it means to be a part of the central bank and the role and responsibility of the central bank to be open and available to provide liquidity when the financial market needs it most,” Logan said about the bank’s response to the 9/11 attack in a January interview on the Macro Musings podcast.

Most recently, she helped with the rapid expansion of the Federal Reserve’s balance sheet in response to the global pandemic.

She holds a bachelor’s degree in political science from Davidson College and a master’s degree in public administration from Columbia University. The Versailles, Ky., native said in a statement she is “excited about moving to Texas and becoming involved in the community.”

Kaplan, her predecessor in Dallas, retired in October when it was disclosed that he and former Boston Fed president Eric Rosengren traded in stocks in 2020 while voting on critical monetary policy during the pandemic. He said he didn’t want his stock activities to cause a distraction from the Fed’s work.

While the stock trades were legal, they raised questions about whether more rules should be placed on Fed executives’ trades. The Fed has new rules barring its leaders from purchasing individual stocks and requiring more transparency, including approval from ethics officials for any trade and public disclosure of financial transactions within 30 days.

The Dallas Fed president search process included a six-member committee, which worked with a consulting firm to narrow down the candidates. Logan’s selection was then approved by the Fed’s Board of Governors.

Reserve Bank presidents serve five-year terms that end at the end of February in years ending with numerals 1 or 6, such as 2021 and 2026. Since Logan is joining in 2022, she will serve out the remainder of the term until February 2026. Dallas Fed directors will vote then on whether to reappoint her to a new term.

Dallas Fed first vice president Meredith Black had been serving as its interim president. She is retiring Sept. 1 after a 39-year career.

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Dive Deeper:
Fed chair Jerome Powell confirmed to second term
He is tasked with leading the central bank as it tries to battle surging inflation and financial markets in tumult..
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