By Gregory DL Morris
Nancy Teeters,
first female Fed governor,
opposed high rates
Bettmann
As the politically agonizing year of
2016 winds down, the debate over whether
the Federal Reserve should raise interest rates—and, if so, by how much—was
largely overshadowed by the bitter presidential race.
In dramatic contrast to the campaign
for the White House, the long-running
discussion about interest rates so far has
been sharp but civil and substantive. It has
shown how far the country’s economy and
economic understanding have advanced.
Most notably, the discussion is being
led by the first woman to be chair of the
Fed Board of Governors, Janet Yellen. The
increase in question is a quarter point to a
range of 0.5–0.75%; less than 40 years ago
there was another initiative to increase rates
by a quarter percent, but that was to 8%. It
was opposed by the first woman to sit on
the Fed’s board, Nancy H. Teeters, and her
advocacy earned her the title of “Fed Dove.”
Teeters joined the board of governors of
the Federal Reserve System on September
18, 1978. She was appointed by President
Jimmy Carter and served until June 27,
1984.
According to her November 23, 2014
obituary in Bloomberg by Laurence
Arnold, “Teeters was a lonely dissenting
voice when, in her view, the war on inflation led by [Fed Chairman Paul] Volcker
went too far.” She protested as large banks
raised their prime rates to 21.5% in December 1980 and warned that high interest rates
would cause the US economy to contract.
“Because Fed dissents aren’t disclosed
to the public until minutes are released,
often weeks after a meeting, the impact of
Teeters’ opposition was limited,” Arnold
wrote.
According to Secrets of the Temple: How
the Federal Reserve Runs the Country, by
William Greider (1989), Teeters’s opposition to large interest-rate hikes were “discounted during the long recession because
she was regarded as a ‘knee-jerk liberal.’”
She was “well known and respected as a
Nance Teeters, the first female governor of the
Federal Reserve Board, tells the House Banking
Committee on March 26, 1980 that the Fed
is considering allowing credit card lenders to
charge consumers higher interest rates on old
debts if they make new purchases.
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