Chicago Federal Reserve Bank President Michael Moskow will retire on Aug. 31 after 13 years, the bank said on Monday, adding a new layer of uncertainty to the Fed’s interest-rate policy deliberations for the year.
A search for a successor to Moskow is under way, the bank said.
The 68-year-old Moskow, seen recently as a monetary policy hawk, has led the Chicago Fed since 1994. His retirement had been expected and is in keeping with the U.S. central bank’s mandatory retirement policy.
“Michael Moskow has made invaluable contributions to the Federal Reserve Bank of Chicago and the Federal Reserve System. We will miss his thoughtful insights, his leadership, and expertise on a wide range of banking and monetary issues,” Fed Chairman Ben Bernanke said in a statement.
The Chicago Fed has a vote on the policy-setting Federal Open Market Committee in 2007, and Moskow’s departure will create added uncertainty about the makeup of the committee.
In recent years Moskow, once viewed as a centrist on monetary policy, has acquired a more hawkish reputation.
Some saw Moskow as the most likely among this year’s voters to call for further interest rate hikes, taking up the mantle of Richmond Fed President Jeffrey Lacker at a time the Fed’s consensus is seen as keeping rates steady.
“His retirement will see the departure of one of the Fed’s recently more hawkish voices. ... It remains to be seen whether his successor will adopt a similar stance,” said David Sloan, analyst at 4CAST Ltd. in New York.
Moskow is also one of the Fed policy-makers least keen on the more formal inflation targeting approach thought to be favored by Bernanke.
Moskow is expected to continue in policy deliberations until his departure. There are five FOMC meetings between now and end-August, starting with the Jan. 30-31 meeting.
Earlier this month, Cathy Minehan, president of the Boston Fed, said she would retire in 2007 once a replacement has been selected. Minehan is seen as a centrist on rate policy.
The Atlanta Fed has also been without a president since the retirement of Jack Guynn in October, and there is still a vacancy on the Federal Reserve Board following the departure of Mark Olson in June.
Moskow came to the Fed after a long career in both private enterprise and public service, including a stint as deputy United States trade representative under the first President Bush. He also serviced as an under-secretary of labor at the U.S. Department of Labor in the 1970s.
Moskow joined the private sector in 1977 at Esmark, Inc. in Chicago and later held senior management positions at Northwest Industries, Dart and Kraft, Inc., and Premark International, Inc., a spin-off from Dart and Kraft.
At the time of his appointment to the Fed, Msokow was a professor of strategy and international management at the Kellogg Graduate School of Management at Northwestern University.
“I am proud of our accomplishments and value the many relationships that I have been able to form with people throughout Chicago and the Midwest. I look forward to staying active and engaged in a number of different civic and professional pursuits,” Moskow said.
Moskow originally had been slated to retire in 2004. In 2002, the bank’s board, with the approval of the Federal Reserve’s Board of Governors in Washington, extended his mandatory retirement date until the end of August of this year.
The Chicago Fed has named a committee from its board and the board of its Detroit branch to conduct a nationwide search for Moskow’s successor.
The committee will be headed by Miles White, chairman of Abbott Laboratories and also chairman of the Chicago Fed. Also serving will be John Canning, chairman of Madison Dearborn Partners; Valerie Jarrett, president of the Habitat Company; and Ralph Babb, chairman of Detroit-based Comerica Inc.