Biden unveils three nominees for prime Fed posts as central financial institution prepares to carry rates of interest
President Biden on Friday unveiled a trio of nominees for leadership roles at the Federal Reserve, which would increase diversity and give the central bank a more liberal stance as it prepares to raise interest rates for the first time in four years.
The White House nominated Sarah Bloom Raskin, Lisa Cook and Philip Jefferson to fill three seats on the Fed’s powerful Board of Governors. If confirmed, they would join lone Democrat Lael Brainard on the seven-member board.
For Raskin, it’s her second go-around. The Duke professor served on the Fed’s board of directors during the Obama administration from 2010 to 2014, previously serving with current Chairman Jerome Powell. Her husband is US Rep. Jamie Raskin from Maryland.
She has been named the next vice chair of the regulator, making her the Fed’s top Wall Street cop. She is seen as a supporter of tighter banking regulations and favors more climate-related rules, but has already drawn opposition from some Republicans.
Sen. Pat Toomey of Pennsylvania this week criticized Raskin for previously writing that the Fed should not encourage lending to oil and gas companies
Cook and Jefferson, both black, are respected economists.
Cook served as Biden’s economic adviser and a member of an advisory board to the Chicago Federal Reserve during the 2020 presidential campaign. Jefferson is a former Fed economist and currently a professor at Davidson College in North Carolina.
The Fed has had only three other African American board members in its 108-year history.
“We are in a moment of historic economic progress alongside unique economic challenges as we work to fuel our recovery. This is a moment that calls for solid, independent leadership from the Federal Reserve Board of Governors,” President Joe Biden said in a statement.
“As such, I am proud to nominate Sarah Bloom Raskin, Lisa Cook and Philip Jefferson, who will bring a diverse range of knowledge, experience and expertise to the Board of Governors.”
The new nominees would join the Fed at a crucial time, but they are unlikely to persuade the Fed to change its current roadmap, analysts say.
The central bank is issuing a massive bond-buying program and is on track to raise interest rates in 2022 for the first time since the pandemic to combat the biggest spike in U.S. inflation in nearly four decades.
The cost of living has risen nearly 7% over the past year, helped in part by huge stimulus from the central bank and federal government.
The stimulus helped shore up the economy and fuel a speedy recovery, but all the spending was also overwhelming companies’ ability to keep up with demand. Persistent bottlenecks in the global flow of goods have increased the misery.
What the new nominees could influence is the timing of the central bank’s efforts to decouple the economy from federal stimulus measures.
They could also push for tougher financial regulations or urge the Fed to give more weight to inequality and climate change in its decisions.