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Report: Pimco economist Clarida emerges as front-runner for Fed vice chair post

An economist at Pacific Investment Management Co. LLC, Richard Clarida, has emerged as the front-runner to become the next Federal Reserve vice chair, Reuters reported March 2, citing "two people familiar with the effort" to fill high-ranking vacancies in the U.S. central bank.

The White House has interviewed Clarida and at least three other contenders for the job in the last couple of months. The White House has also interviewed Cleveland Fed President Loretta Mester; Mohamed El-Erian, chief economic adviser at Allianz SE and a former International Monetary Fund deputy director; and San Francisco Fed President John Williams.

"He is the front-runner," one of the two people said of Clarida, who is managing director and monetary policy analyst at Pimco. Clarida also teaches at Columbia University's economics department, where he was previously the chairman.

Clarida had the best shot at getting Trump's approval, the two people familiar with the search told Reuters. The Pimco executive was endorsed by Stanford University professor John Taylor, who was a candidate in 2017 for the Fed chair, one of the sources said.

Clarida is seen to likely align ideologically with the centrist Powell, having previously argued that the Fed will probably not be able to raise rates as much as in past cycles, said the Reuters report. The Pimco economist had also warned that investors might be "a little too relaxed" about the threat of higher inflation.

Prior to joining Pimco, Clarida was an assistant Treasury secretary under George W. Bush.

The vice chair job, which has been vacant since Stanley Fischer stepped down in October 2017, is seen as one of the most influential Fed positions together with the chair and the head of the New York Fed, Reuters reported.

Meanwhile, there is also a "short list" for the replacement of Federal Reserve Bank of New York President William Dudley, who announced plans to retire by mid-year, people familiar with that search told Reuters. New York Fed directors, instead of the White House, will choose his successor.