Martha Segar Plans to Resign from Federal Reserve Board

Article excerpt

By David E. Rosenbaum WASHINGTON - Martha R. Seger, the Federal Reserve Board's most outspoken advocate of lower interest rates, plans to resign within the next two months.

Seger, 58, has been on the board since 1984, longer than any other member. Her resignation will give President Bush his third chance to fill a seat on the seven-member board, but it is unlikely to change the balance between those who want lower interest rates and those who favor higher rates to fight inflation.

The Federal Reserve Board determines the nation's monetary policy and thus has more influence over the economy than any other government agency. It also is one of the principal regulators of the banking system.

Seger has seven years remaining in her 14-year term, but Fed governors rarely serve the full 14 years.

In a letter she sent to President Bush Wednesday, Seger said she was resigning to ``pursue other interests and tend to personal and family responsibilities.''

In the last few years, she has consistently voted in the minority, often as the only dissenter, against what she saw as a Federal Reserve policy of keeping interest rates too high.

At a news conference Wednesday evening, she said the failure of the Fed to lower rates in the first half of this year might have contributed to the current recession. Certainly, she said, the Persian Gulf crisis contributed to the economic downturn, but she added, ``The economy was slowing dramatically before Saddam Hussein even looked cross-eyed at Kuwait. …