White House Nominates Diverse Slate of Candidates to Fed Board
The Biden administration is picking Sarah Bloom Raskin, who has a long record of pushing tougher regulation, as the nation’s top bank cop.
President Biden nominated three new Federal Reserve officials on Friday as he seeks to remake the central bank at a critical economic moment, announcing a slate of candidates that would make for the most diverse Fed Board of Governors in the institution’s 108-year history.
The White House nominated Sarah Bloom Raskin to serve as the Fed’s vice chair for supervision, a job created to police the nation’s largest banks after the 2008 financial crisis. He also nominated Lisa Cook, an economist at Michigan State University who has researched racial disparities and labor markets, and Philip Jefferson, an economist and administrator at Davidson College, to governor positions. Both are Black.
Mr. Biden had previously nominated Jerome H. Powell for a second stint as Fed chair and Lael Brainard, now a governor, as vice chair of the central bank. If all of his picks are confirmed to their posts, the Fed’s seven-person board in Washington would be the most diverse group in its history.
The administration had promised to make the Fed look more like the public it served, and prominent lawmakers have pushed for a focus on tougher financial regulation. The central bank is independent of politics in its operations — answering only to Congress and not to the White House — but Mr. Biden has had a chance to remake the central bank through appointments, nominating five of its seven officials in Washington.
“I have full confidence in the strong leadership of this group of nominees, and that they have the experience, judgment, and integrity to lead the Federal Reserve and to help build our economy back better for working families,” Mr. Biden said in a statement announcing the decision.
The Fed tries to guide the economy using borrowing costs and has two main goal: Keeping prices stable and fostering full employment.
Democrats tend to focus on the jobs side of that equation, but the last year has flipped that script to some degree. Inflation is running at its fastest pace since 1982 as the economy rebounds from the pandemic rapidly, eating away at paychecks and hurting consumer confidence. Getting prices under control has increasingly become a priority across parties.
Ms. Cook and Mr. Jefferson will both bring years of academic experience and economic training to bear in their roles, and both will hold a constant vote on interest rate policy.
Ms. Cook attended Spelman College and the University of Oxford and earned a doctorate in economics from the University of California, Berkeley. She was an economist on the White House Council of Economic Advisers under President Barack Obama. Mr. Jefferson has worked as a research economist at the Fed, and studied at the University of Virginia and Vassar College. He has written about the economics of poverty, and his research has delved into whether monetary policy that stokes investment with low interest rates helps or hurts less-educated workers.
Ms. Raskin’s new job would make her the nation’s top bank cop. She has extensive experience in Washington, having served in top roles at both the Federal Reserve and the Treasury in the past. She has also worked in the private sector, and is teaching a Duke University’s law school.
She is a Harvard-trained lawyer who studied economics as an undergraduate at Amherst College, and she has a track record of pushing for tougher bank regulation — something that makes her popular among Democrats, but which could earn her a tough confirmation battle.
All of the nominees need a simple majority to win confirmation, which means that they can plausibly pass with just Democrat votes, but given the party’s narrow control of the Senate, they need to either maintain the support of all of its members or garner some Republican support.
Senator Patrick J. Toomey, Republican of Pennsylvania, made clear in a statement released shortly after the pick that he has concerns with Ms. Raskin’s nomination and how she would approach financial regulation.
“I have serious concerns that she would abuse the Fed’s narrow statutory mandates on monetary policy and banking supervision to have the central bank actively engaged in capital allocation,” he said in a release after news of the picks broke on Thursday night.