The Federal Reserve Bank of NY, the most powerful and influential regional branch of the USA central bank, named John C. Williams as its next CEO and President on Tuesday.
It was Dudley who in February 2017 spelled out a "compelling" case for a rise in interest rates ahead of a rate-setting meeting and dragged market pricing into line with the Fed's path on interest rates.
In the past, Williams has conveyed a moderate stance on monetary policy and supported the central bank's guidance of three or four rate hikes in 2018.
The New York Fed is the branch that's largely in charge of overseeing Wall Street banks and investigating wrongdoing, and is the only permanent member of the Federal Open Market Committee, which decides interest rates.
Despite his expertise, there are concerns that Williams' appointment could be met with resistance.
Mehran said he believes his bank can be "a little more patient" than the New York Fed in finding a suitable candidate, and pledged to seek input from the public on the process.
"The New York Fed has never been led by a woman or a person of color, and that needs to change", Senator Kirsten Gillibrand, Democrat of New York, said in a statement last week. Neither of the other two finalists for the job - Raymond McGuire, an executive at Citigroup, and Mary J. Miller, a former Treasury official - were white men, and the search committee also interviewed other candidates who would have brought diversity to the Fed.
Williams, 55, started his career with the Federal Reserve System as an economist at the Board of Governors in 1994.
The post is not open to congressional review, although Williams has also faced criticism over San Francisco-based Wells Fargo, which opened millions of fraudulent customer accounts under his watch.
Despite the lack of experience dealing with Wall Street, Williams won't be starting from scratch, says John Taylor, a Stanford professor who wrote a paper with Williams on a problematic jump in financial market spreads in early 2008.
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