News

By Michael S. Derby

NEW YORK (Reuters) -The Federal Reserve Bank of Philadelphia said on Wednesday it is launching a search to replace its current leader, Patrick Harker, who will retire next summer.

"We will run an open and inclusive nationwide search including broad input" from the Philadelphia Fed district, Anthony Ibarguen, CEO of Quench USA and chair of the Philadelphia Fed's board of directors, said in a press release. "Our goal is to find a new leader who will carry on President Harker's service to our communities and commitment to promoting a strong U.S. economy."

Harker, who has helmed the Philadelphia Fed since 2015, is slated to exit the regional Fed bank on June 30, 2025, due to central bank rules that generally compel regional Fed presidents to retire when they hit the age of 65. Mandatory retirement often drives regional Fed leadership successions, with the most recent exit being that of Loretta Mester, who led the Cleveland Fed until last June.

The Philadelphia Fed's press release noted that the succession process for Harker will be led by members of the regional Fed bank's board who do not represent firms regulated by the U.S. central bank. Each of the 12 regional Fed banks, which are quasi-private, are overseen by boards which draw their members from the private sector.

Before taking control of the Philadelphia Fed in 2015, Harker served on its board and was in academia, having been educated as an engineer.

In his most recent comments, Harker expressed support for the Fed starting a process of gradual interest rate cuts to better align monetary policy with ebbing inflation pressures.

The Philadelphia Fed's press release noted those involved in the succession process "will conduct a rigorous, comprehensive search to identify a diverse pool of qualified candidates who demonstrate expertise and a deep commitment to public service."

The Fed's efforts to recruit new regional Fed leadership have been made more challenging by new ethics rules that sharply limited how policymakers and top staff can manage their personal finances. As of last year, the Philadelphia Fed's president was paid $481,000.

The process of filling regional Fed vacancies has long been dogged by concerns about transparency. Officials on the Fed's board of governors are nominated by the U.S. president and confirmed by the Senate, whereas the effort to fill regional Fed openings happens behind closed doors, with little public knowledge of who is even in contention for those jobs.

Recent regional Fed bank leadership changes have been leading to candidates with more extensive financial market backgrounds, with the current leaders of the Dallas, Cleveland and St. Louis Fed banks defined by their considerable expertise on that front.

Whoever the Philadelphia Fed board chooses as leader must also be approved by the Fed's board of governors.