A former Federal Reserve governor who expressed concern that central bank policies could spark financial instability is headed for the world of hedge funds.
Jeremy Stein signed up as a paid consultant to BlueMountain Capital Management, the more than $20 billion New York hedge-fund firm, the firm confirmed.
Mr. Stein, 54, made a quick impact in his two years as a Fed governor, warning of potential asset bubbles from the central banks’ sustained post-crisis stimulus programs. That set him apart from his colleagues who felt that financial stability concerns were far from the top priority in a sluggish economic environment. He resigned in May 2014.
More recently, he has said he is bullish on the U.S. economy, and relatively unsure on whether the Fed will raise rates in June.
At BlueMountain, Mr. Stein will advise on macro policies, financial regulation and risk management, among other issues.
Hedge funds, and so-called alternative investment firms more generally, have been attractive destinations for exiting government officials in recent years. Former Obama administration chief of staff William Daley joined Swiss hedge fund Argentiere Capital, while former Treasury Secretary Timothy Geithner and former Central Intelligence Agency chief David Petraeus took posts at private-equity firms Warburg Pincus LLC and KKR & Co., respectively.
Credit-focused BlueMountain was founded in 2003 by former J.P. Morgan trader Andrew Feldstein and ex-McKinsey & Co. consultant Stephen Siderow. Both earned law degrees from Harvard, where Mr. Stein remains an economics professor.