WASHINGTON – Federal Reserve Governor Laurence Meyer said Monday he will resign when his term ends on Jan. 31, giving the Bush administration another opportunity to name a board member to the U.S. central bank.
"It has been a great privilege and honor to serve the country as a member of the Federal Reserve Board of Governors. I am grateful to President Clinton and the Senate for the confidence they showed in me and for providing me with this opportunity," Meyer said in his resignation letter, which was released by the Fed.
Meyer, 57, was appointed to the Fed board by then-President Clinton in 1996 and was widely known for his reputation as an economic forecaster. As is tradition, he will not attend the final Fed interest-rate policy meeting of his tenure on Jan. 29-30.
Upon Meyer's departure, the Fed board will have two vacancies. The Bush administration has already appointed two board members, Mark Olson and Susan Bies, to the seven-member board.
"MAJOR CONTRIBUTION" TO POLICY
"Larry Meyer has made a major contribution to the Board's monetary policy," said Fed Chairman Alan Greenspan in a press release issued with the letter.
"His thoughtful insights into difficult issues and his technical expertise have materially enhanced the deliberations of the Board and the Federal Open Market Committee. His influence will extend beyond his tenure as a Board member," Greenspan said.
Before joining the Board, Meyer headed St.Louis-based economic consulting firm Laurence H. Meyer and Associates. He was also an economics professor at Washington University.
In 1986, he was honored by Business Week magazine as the top forecaster on its forecasting panel.
Meyer often couched his forecasts in terms of the theoretical trade-off between unemployment and inflation, a stance that during the economic boom years of the late Nineties often had him advocating tighter monetary policy. But in a recent speech on the U.S. economy in the wake of the Sept. 11 attacks, Meyer surprised some analysts by saying it would be "misguided" for the Fed to slow its interest rate cuts as rates edged closer to zero.
The federal funds rate, the overnight interbank lending rate set by the Fed, now stands at 1.75 percent, the lowest since 1961.