5 Things to Know About New York Fed's Incoming President

The Laubach-Williams model suggests the neutral rate has fallen significantly since the financial crisis, and may not be going back up again any time soon.

That's why Williams has become increasingly associated with another big idea shaping the policy debate at the moment: if the neutral interest rate is so much lower now than it was historically, maybe the Fed should consider raising its inflation target.

Higher inflation would lead to higher interest rates than otherwise, which would allow the Fed more room than they have now to cut rates in response to future economic downturns.

4. Not a Banker

Williams's past doesn't include stints in the financial industry. That could help him avoid a frequent criticism: that Fed officials are too close to the firms they oversee. That complaint was sometimes levied against Dudley, who came to the central bank from Goldman Sachs.

But a lack of banking ties may have drawbacks. The New York Fed president sits at the intersection of financial markets and the economy, communicates regularly with the largest banks in the U.S., and, in Dudley's case, brought real-world experience to the position.

Williams likes to make the point that he doesn't have a Bloomberg terminal on his desk — the implication being that he goes out of his way to avoid paying attention to short-term swings in the markets.

That's not necessarily a bad thing, but it will probably have to change for a role that oversees Wall Street. The last New York Fed president to make a similar leap was Gerald Corrigan, who moved from the Minneapolis Fed to the Big Apple in 1985.

5. Quirky Character

Williams, who waxed romantic on the benefits of island garb during a recent appearance in Hawaii, likes to give speeches filled with song references — rock band Green Day is one example — which is pretty unusual for a Fed official. He also loves to play video games (Dark Souls is his favorite) and he's an avid fiction reader.

Another fun fact: John Taylor — a vocal critic of Fed policy in recent years who's also famous for creating a widely-used monetary-policy rule — was Williams's thesis adviser at Stanford University, where he earned his Ph.D. Williams, who's married with two sons, is originally from Sacramento, and his father served as an adviser to four consecutive California governors.