President Joe Biden has picked three nominees for open slots on the Federal Reserve board, including progressive favorite Sarah Bloom Raskin for the top job overseeing the nation’s banks, according to three people familiar with the matter.
In addition to Raskin, Biden tapped Lisa Cook and Philip Jefferson, both Ph.D. economists with a strong focus on labor markets, the people said. They would join only a handful of Black Americans who have been tapped for those coveted posts in the history of the Fed. Cook would be the first woman of color to serve on the Fed board.
The White House delivered the names of the nominees to the Senate Thursday night, according to one of the people.
“President Biden has nominated a serious, qualified, nonpartisan group of five nominees for the Board of Governors of the Federal Reserve who together will bring an extraordinary amount of skill, experience, and competence to the Federal Reserve,” the person said. Biden previously renominated Fed Chair Jerome Powell for a new term and chose Fed Governor Lael Brainard to serve as vice chair.
By naming Raskin, a former Fed governor and onetime deputy Treasury secretary, Biden is putting in place an aggressive regulator who has pressed for tougher oversight of Wall Street. That could mollify financial regulation advocates who have slammed Powell for easing rules on big financial firms and not doing more to combat climate change.
Biden announced in November he would tap Powell — a Republican first named Fed chief by then-President Donald Trump — for another term as chair, opting for continuity at the central bank as the specter of rising inflation looms in an election year.
Still, Biden’s latest picks would put a solid Democratic stamp on the central bank, strengthening the Fed’s focus on the well-being of American workers as well as on new, potentially explosive issues such as climate change and racial equity. They may also be a counterweight to a growing push to act more aggressively to fight soaring prices, another possible source of tension on the board.
With inflation surging at its highest rate in four decades, the Fed has begun to pull back on its extraordinary support for financial markets and is expected to begin raising interest rates over the coming months. It will be a careful balancing act for Fed officials, who are aiming to cool the economy without triggering a recession. They face political pressure from both sides of the aisle to curb prices, while at the same time ensuring the labor market continues to improve.
Once Biden formally unveils the nominees for the three remaining vacant seats, the Fed would have five pending appointments, including Powell and Brainard, who appeared before the Senate for nomination hearings this week.
Cook, a Michigan State University professor, was enthusiastically supported by climate advocacy groups. Progressive activists have also praised her work on the economic effects of racial discrimination and her role as a mentor to many younger people of color in economics. She served as a senior economist at the White House Council of Economic Advisers during the Obama administration.
Jefferson, a former Fed economist, is a professor and administrator at Davidson College in North Carolina. His work has focused on the “role of education as a buffer against unemployment, the effect of business cycles on poverty rates, and the distribution of income between labor and capital,” according to his bio.
The nominees are likely to draw skepticism from many Republicans, who have been critical of what they view as the Fed overstepping its mission.
“Members of the Fed’s Board of Governors should have exceptional qualifications and a strict view of the Fed’s narrow mandates on monetary policy and banking supervision,” Sen. Pat Toomey (R-Pa.), the top Republican on the Senate Banking Committee, said in a statement Thursday night. “I will closely examine whether Ms. Cook and Mr. Jefferson have the necessary experience, judgment, and policy views to serve as Fed Governors.”
Toomey, who has already raised concerns about Raskin’s nomination, said he worried 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.”