Top Federal Reserve officials are in the final stages of a search to fill two top staff jobs overseeing its financial markets operations, according to people familiar with the matter.
Candidates who have been considered for the New York Fed posts include private-sector economists Daleep Singh and Charles Himmelberg, according to these people. Lorie Logan, the interim manager of the central bank’s asset portfolio, is also seen as a front-runner for one of the two positions, these people said.
The person in one of the jobs will oversee the central bank’s $4 trillion securities portfolio and open market operations, implementing Fed officials’ interest rate decisions. The other will handle the markets group’s operations and technology.
The two positions were created to assume the responsibilities previously held by one person, Simon Potter, who was ousted in June by New York Fed President John Williams.
The decision comes as Fed officials are debating numerous technical decisions to fine-tune their control of very short-term interest rates following a mid-September spike in a key overnight lending rate.
Mr. Singh is currently chief North American economist at SPX Capital, a Brazilian investment fund. He served in the Treasury Department’s international division and markets room from 2011 to 2016, when he was named acting assistant secretary for financial markets, a position he served until the end of the Obama administration in 2017. Before that, he worked at Goldman Sachs Group Inc.
Mr. Himmelberg is chief markets economist at Goldman Sachs, where he has worked since 2005. He worked at the New York Fed from 2001 to 2005 and taught economics at Columbia University and New York University. He has co-written several papers with Simon Gilchrist, a Boston University economist who has also collaborated on research with Mr. Williams.
Ms. Logan has worked at the New York Fed since 1999 and played a prominent role in developing and implementing the Fed’s post-crisis-era policies, including the expansion of the $4 trillion asset portfolio and the tools used to help unwind that support when the Fed lifted interest rates from near zero earlier this decade.
None of the candidates responded to inquiries seeking comment. Fed representatives declined to comment. It couldn’t be learned if officials are considering additional candidates.
The appointments are the most important facing Mr. Williams, who became New York Fed president in June 2018 after leading the San Francisco Fed for seven years.
Since the 2008 financial crisis, the head of the New York Fed’s markets desk has been the most high-profile staff job at the central bank. The people who have held the role were highly influential in helping officials create and employ new policy tools.
The markets desk implements Fed policy by buying and selling securities in trades with private financial firms, and the officer briefs top officials at each policy meeting on the state of the markets and the working of central-bank policies.
The personnel search has drawn added attention because the Fed has “lost some confidence among market participants over the last few months that they’re on top of things,” said Julia Coronado, a former Fed economist who runs an economic consulting firm and is on an advisory panel at the New York Fed.
Interest rates in very short-term lending markets rose sharply in mid-September due to shortages of funds that banks were willing to lend.
The Fed responded by injecting billions of dollars into markets to pull rates down to its target range.
Wall Street veterans and former Fed officials said that tapping two outsiders for the jobs could further hurt flagging morale at the New York Fed. Ms. Logan served as Mr. Potter’s deputy and had been groomed to succeed him. “She is widely regarded for her competence and experience,” said Ms. Coronado.
When Fed officials met in a rare videoconference in early October, Ms. Logan briefed officials on steps to address temporary money-market volatility. The rate-setting committee unanimously adopted a proposal she outlined to purchase $60 billion a month in short-term Treasury bills.
Those purchases could decline over time and will last at least into the second quarter of next year. They are designed to replace the daily and week-to-week cash injections the Fed has been conducting to prevent further funding strains.
In late May, Mr. Williams roiled the New York Fed when he announced Mr. Potter and another senior executive would be leaving.
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People familiar with the matter said the departure had less to do with particular policy disputes than with tension over day-to-day management issues including personnel, promotions and strategic direction. Tensions had been building for months between the two men and their bosses, Mr. Williams and Michael Strine, the bank’s operating chief.
In addition to monetary-policy implementation, Mr. Potter’s portfolio included a range of issues including cybersecurity and technology. His departure followed a problem-plagued technology project the markets group oversaw called Titan, a front-to-back revamp of the Treasury’s electronic system for receiving and processing bids sent into U.S. Treasury auctions.
Fed Chairman Jerome Powell and Vice Chairman Richard Clarida are said to be participating in the search process for the portfolio manager candidate, according to people familiar with the process.
Promoting from within the bank could help improve morale that was unsettled first by the management shake-up in June and later by the market rupture in September.
“I am impressed by how strong our team has been,” Mr. Williams told reporters last week. “We haven’t lost a step or missed a cue on any of this. They’ve done a fantastic job.”
Write to Nick Timiraos at nick.timiraos@wsj.com
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