By Nick Timiraos 

The White House is considering John Williams, the president of the Federal Reserve Bank of San Francisco, as a candidate to serve as the vice chairman of Federal Reserve Board in Washington, according to people familiar with the matter.

Mr. Williams succeeded Fed Chairwoman Janet Yellen as the San Francisco Fed leader in 2011, after Ms. Yellen was tapped by President Barack Obama to serve as the Fed's vice chairwoman in 2010. Mr. Williams previously served as the bank's research director, reporting to Ms. Yellen, and would fit the Trump administration's interest in filling the vice chairman post with someone who is a widely respected expert in monetary economics.

Mr. Williams joined the San Francisco Fed in 2002 and previously served as a senior economist for the Fed board in Washington, joining the central bank in 1994.

A spokesman for the San Francisco Fed declined to comment.

The White House has interviewed several other economists for the position, and it isn't clear whether there is a front-runner or when a nominee will be named. Other candidates have included Richard Clarida, a managing director at money manager Pimco; Lawrence Lindsey, a former Fed official who later served as a top economic adviser to President George W. Bush; and Mohamed El-Erian, the former chief executive of Pimco.

The process of selecting the central bank's No. 2 official has received more attention from investors than in the past because President Donald Trump has nominated Fed governor Jerome Powell to succeed Ms. Yellen when her term expires next month.

Mr. Powell, who has voted consistently to support Ms. Yellen's interest-rate policy decisions, if confirmed by the Senate would be the first Fed leader in three decades without a Ph.D. in economics. That could give the vice chairman more influence on theoretical economic debates than was the case under Ms. Yellen or her predecessors Ben Bernanke and Alan Greenspan.

Mr. Trump will have an opportunity to select most of the Fed board's seven members. The panel has three vacancies now. Ms. Yellen has said she would resign her seat as a governor after her successor has been sworn in; her term as chairwoman ends Feb. 3.

Fed governor Randal Quarles, Mr. Trump's first Fed nominee, took office in October.

Besides Ms. Yellen, the Fed board only has one other Ph.D. economist, Lael Brainard, who was nominated by President Barack Obama.

Mr. Trump has nominated Marvin Goodfriend, an economist at Carnegie Mellon University, to fill one of the vacant board seats, and a Senate committee is set to consider his nomination Tuesday.

Mr. Williams's candidacy is noteworthy because while he has been viewed as a close ally of Ms. Yellen, he has sometimes taken positions that are controversial among his colleagues or with the public. He also has collaborated on research with his former professor, Stanford economist John Taylor, whom Mr. Trump considered as a candidate for Fed chairman and who remains popular with conservatives on Capitol Hill.

In recent months, for example, Mr. Williams has revived calls for the Fed to debate proposed changes to its current policy framework of targeting 2% inflation.

Mr. Williams has advocated recently for a price-level target, which would allow the Fed to make up for periods of below-target inflation by allowing inflation to run higher later during an expansion to make up for the earlier shortfall.

"I think we need to think seriously about how we would do one or a combination of these to prepare ourselves better for that next storm," Mr. Williams said in a call with reporters in November.

The Fed formally adopted its 2% inflation objective in 2012 after maintaining such a target informally for many years. Officials have said they didn't move ahead with more radical changes at that time in part because they were focused on healing the damage from the 2007-09 recession.

Discussions around changing the inflation framework have taken on new attention now because the economy is seen as largely recovered from the crisis and officials are looking ahead to how they might boost growth in a future downturn, when they are likely to have less room to cut interest rates than in past recessions.

If Mr. Williams were nominated, it could signal a greater prospect of a shift in the Fed's inflation objectives, which would have important ramifications for how the Fed sets short-term interest rates. Still, any decisions are likely more than a year away.

Write to Nick Timiraos at nick.timiraos@wsj.com

(END) Dow Jones Newswires

January 18, 2018 19:17 ET (00:17 GMT)