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McTeer's Departure Could Crimp Colorfulness

The bond market will lose a window into the Federal Open Market Committee's thinking if and when Federal Reserve Bank of Dallas President and CEO Robert McTeer, Jr. leaves to become chancellor of the Texas A&M University System.

Robert McTeer, Jr.

The bond market will lose a window into the Federal Open Market Committee's thinking if and when Federal Reserve Bank of Dallas President and CEO Robert McTeer, Jr. leaves to become chancellor of the Texas A&M University System. McTeer is currently the sole candidate for the position and may join the school as early as Nov. 4, according to James Hoard, Dallas Fed spokesman. McTeer, an amateur poet, is perceived by some Fed watchers as a straight-shooting dove who is more forthcoming with his comments on the economy than other members. Others say he often makes public personal views that are not in line with the committee's broader thinking, and this actually muddies the waters.

"I think you'll lose some of the spice and insight of the FOMC," said Ethan Harris, chief U.S. economist at Lehman Brothers. "Sometimes you get the sense you're not hearing the completely straight story out of the FOMC members. McTeer would depart from the script once in a while and talk about the true concerns of the Fed," he explained.

However, Harris said he does not expect McTeer's departure would change the dynamic of the FOMC, since McTeer is currently not a voting member. Although the next president will be a voting member because of the system's rotation, "a newcomer lacks weight to push the meeting one way or the other," Harris noted.

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