President Joe Biden on Friday unveiled a trio of nominees for leadership roles at the Federal Reserve in a move that would increase diversity and give the central bank a more liberal tilt 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 was a Fed board member from 2010 to 2014 during the Obama administration and previously served with current Chairman Jerome Powell. Her husband is U.S. Rep. Jamie Raskin of Maryland.
She has also been nominated to be the next vice chairwoman of supervision, making her the Fed’s top Wall Street cop. She’s seen as a supporter of tougher bank regulations and favors more climate-related rules, but has already drawn opposition from some Republicans.
Sen. Pat Toomey of Pennsylvania criticized Raskin this week for previously writing that the Fed should not encourage lending to oil and gas providers
Cook and Jefferson, who are both black, are distinguished economists.
Cook was an economic adviser for Biden during the 2020 presidential campaign and served on an advisory board at the Chicago Federal Reserve. Jefferson is a former staff economist at the Fed and current professor at Davidson College in North Carolina.
The Fed has only had three other African-American board members in its 108-year history.
“We are at a moment of historic economic progress alongside unique economic challenges as we work to drive our recovery forward. This is a moment that calls for sound, independent leadership from the Board of Governors at the Federal Reserve,” Biden said in a statement.
“That is why I am proud to nominate Sarah Bloom Raskin, Lisa Cook, and Philip Jefferson, who will bring a breadth of knowledge, experience and expertise to the Board of Governors.”
The new nominees would join the Fed at a pivotal time, but they are unlikely to sway the Fed’s to alter its current roadmap, analysts say.
The central bank is phasing out 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 increase in U.S. inflation in almost four decades.
The cost of living has surged nearly 7% in the past year, abetted in part by enormous stimulus from the central bank and the federal government.
The stimulus helped prop up the economy and spur a rapid recovery, but all the spending also overwhelmed the ability of businesses to keep up with demand. Lingering bottlenecks in the global flow of trade goods has added to the misery.
What the new nominees could influence is the timing of the central bank’s effort to wean the economy off federal stimulus.
They might also advocate for tougher financial regulations or push the Fed to put more emphasis on inequality and climate change in its decisions.