By Ann Saphir
(Reuters) -After more than a year of search, the Kansas City Federal Reserve Bank has a new leader: Jeffrey Schmid, a former banking executive who ran three different financial institutions over a four-decade-plus career that also included a stint in bank supervision.
Schmid, who for the last two years has led the Southwestern Graduate School of Banking Foundation, will fill one of 19 seats at the nation’s monetary-policy-setting table setting interest rates for the world’s biggest economy.
He starts Aug. 21, the Kansas City Fed said on Wednesday, the week that central bankers from around the world convene at Jackson Hole, Wyoming for the regional Fed bank’s influential annual monetary policy symposium.
His first rate-setting meeting in Washington will be the Fed’s next one, in September, where policymakers are expected to debate whether their ongoing inflation fight requires any further increase in the policy rate that’s already up 5.25 percentage points since the campaign began a year and a half earlier.
His inclusion “will hopefully make their policy deliberations richer as they come into a period where there is a lot of uncertainty,” says LHMeyer’s Derek Tang, noting that the Fed’s next big decisions will include how long to hold policy tight and when to start easing. “It helps to have people from different backgrounds to contribute.”
Schmid, who has a bachelor’s degree in business administration from the University of Nebraska-Lincoln and is a graduate of a training program he now oversees, is the first Kansas City Fed leader to be picked from outside of its own ranks in more than 80 years.
He will also be the fourth new Fed president in the 12-bank Fed system in just over a year. Two of the other newcomers to policysetting are PhD economists with academic backgrounds; the third is a longtime Fed staffer with years of work in monetary policy operations.
A search for a new president at a fifth regional Fed bank, in St. Louis, began last month when its longtime leader, James Bullard, left for a job as dean of a business school.
The Fed’s Washington-based Board is also in the midst of a personnel makeover, with three of its current six members new since last year, and one of those three, Philip Jefferson, in the middle of a Senate confirmation process to become the Fed’s vice chair.
Lawmakers are expected next month to approve Jefferson’s elevation to the central bank’s No. 2 job, and will consider the renomination of another Fed governor who joined last year, Lisa Cook, and the nomination of economist Adriana Kugler to the Fed Board’s seventh and last seat.
The Kansas City Fed’s most recent president was Esther George, who departed in January after hitting the mandatory retirement age of 65. Schmid is 64, and under the Fed’s age-based rules can serve a maximum of 10 years.
The bank’s presidents have typically been hawkish voices on monetary policy. Under the Fed’s regular rotation for regional Fed presidents, Schmid won’t have a vote on U.S. interest rates until 2025, though he will take part in the Fed’s regular rate-setting meetings.
Schmid began his career as a bank examiner for the Federal Deposit Insurance Corporation, before becoming the president of the American National Bank in Omaha and then running the Mutual of Omaha Bank for 12 years as its CEO.
He was CEO of Susser Bank in Dallas for two years before taking his current job where he oversees bank management training programs.
As part of his job at the Kansas City Fed, Schmid will oversee the bank’s economic research, community outreach, and its supervision of banks in the district, which covers Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and parts of New Mexico and Missouri.
(Reporting by Ann Saphir; Editing by Andrea Ricci and Diane Craft)