ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, January 17, 1996 TAG: 9601170077
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: The New York Times
ALAN BLINDER, an advocate of lower interest rates, ended speculation over his future in a letter to President Clinton.
Alan Blinder has told the White House he will leave as vice chairman of the Federal Reserve when his term ends in two weeks, Fed officials said Tuesday.
Blinder, who was named to the Fed in June 1994, has been the chief voice within the nation's central bank for lowering interest rates to stimulate the economy. His departure comes at a moment when the economy appears to be weakening.
Blinder's letter, sent to the White House on Tuesday, put an end to speculation that President Clinton might try to keep him in place as the administration's most influential appointee to the Federal Reserve.
Blinder, a widely respected academic economist from Princeton University, was Clinton's first appointee to the Federal Reserve's seven-member board of governors.
There was some speculation at the time that Blinder, who served on the White House's Council of Economic Advisers in 1993 and early 1994, would eventually be the president's choice to replace Alan Greenspan as chairman. Greenspan's current term ends in March.
The Republican congressional victory in 1994 put an end to White House hopes that Blinder - often thought of on Wall Street as too willing to tolerate some inflation to keep the economy growing - could ever gain Senate approval to replace Greenspan.
Recently, however, administration officials had considered asking the Republican Senate to approve Blinder's reappointment as vice chairman, as part of a package deal that would give Greenspan another term as chairman.
Blinder is expected to announce his departure today. A White House spokeswoman would not comment, saying it was up to Blinder to make public any announcement that he is leaving the Fed at month's end.
Wall Street, which traditionally prefers strong anti-inflationary policies from the Fed, is expected to be glad to see Blinder leave. ``The constituency for easy money - low rates - at the Fed has just lost one of its most outspoken champions,'' said Stephen Roach, chief economist at Morgan Stanley & Co.
In his letter, Blinder, who is 50, is said to have told Clinton that he must return to Princeton at the end of this month, when his Federal Reserve term expires. By failing to return, he would risk losing his tenured position as an economics professor.
Within the next few weeks, Clinton is widely expected to announce the reappointment of Greenspan, who faces little opposition in Congress, to a third term as chairman.
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