Fed official quits; didn't get backing as next chairman
Washington — The drama continues at the nation's usually staid central bank. Federal Reserve Board vice-chairman Preston Martin submitted his resignation Friday. Mr. Martin had made no secret of his desire to be Fed chairman, but he failed to win White House assurances that he would succeed chairman Paul A. Volcker when his term expires in August 1987.
Martin denied that his resignation was related to the recent, widely heralded ``palace revolt'' at the Fed. The dispute over cutting a key Fed lending rate played a ``zero role'' in his decision, Martin said. His letter to President Reagan said he had agonized over the decision ``for the last hundred days.''
Analysts said the departure of Martin, President Reagan's first Fed appointee, was unlikely to cause a radical shift in Fed policy.
In comparison to Mr. Volcker, Martin favored an easier monetary policy aimed at stimulating economic growth.
By moving to increase or decrease the money supply, the Fed can influence interest rates and the pace of economic activity.
A White House official was quoted as saying someone of ``similar persuasion'' would be named to fill the remaining 10 years of Martin's term on the seven-member board. His term as vice-chairman expires March 30.