President Joe Biden has tapped Sarah Bloom Raskin to become the Federal Reserve’s chief banking regulator and will appoint Lisa Cook and Philip Jefferson to two open seats on the board of central bank governors.
The long-awaited announcement, made official in a press release on Friday morning, completes the slew of Bidens’ central bank appointments, and it signals both incremental change and a commitment to diversity. All three have previous work experience with the Fed.
If confirmed, four Democrats will take seats on the Board of Governors, potentially signaling a tougher approach on Wall Street going forward.
Bloom Raskin has extensive policy-making experience, including serving as a former Assistant Secretary of the Treasury Department in the Obama administration, as a Governor of the Federal Reserve, and as a member of the Attachment Branch. central bank rates, the Federal Open Market Committee. .
A law professor at Duke University and a prominent member of the school’s Global Financial Markets Center, Bloom Raskin has widely called in recent months for U.S. financial regulators to play a bigger role in tackling climate change. His nomination signals a willingness by the Biden administration to look to the central bank for action on the issue, Fed watchers say, especially as the president’s climate legislative proposals are stalled in Congress.
Cook, a professor of economics and international relations at Michigan State University, served on the Council of Economic Advisers during the Obama administration and as deputy team leader of the Biden-Harris transition team in 2020. She has also worked with the Federal Reserve Banks of New York, Chicago, Philadelphia and Minneapolis. If confirmed, she will be the first black female governor of the federal government in its history.
She and Jefferson will together be the fourth and fifth black board members.
Jefferson, the current vice president for academic affairs, dean of faculty, and endowed professor of economics at North Carolinas Davidson College, also has extensive Fed experience with both the board of governors and the
Bank of New York
With the nominations of Bloom Raskin and Cook, women will take the majority of seats for the first time, alongside Lael Brainard and Michelle Bowman.
In a statement announcing the appointments, Biden said the appointees will bring much-needed expertise, judgment and leadership to the Federal Reserve while bringing a diversity of thought and perspective never before seen to the Board of Governors.
They will continue the important work of guiding us on the path to a strong and sustainable recovery, while ensuring that price increases do not become entrenched in the long term, the statement added.
The addition of three new Democratic members may not immediately signal major policy changes at a time when most board members are making it clear they want to move quickly to fight inflation, says Stephen Pavlick, head of policies at Renaissance Macro Research.
But especially in the near term, adds Pavlick, the new appointees could focus less on changing the direction of monetary policy and more on using the Fed’s tools to push the central bank into areas beyond its purview. dual mandate of full employment and stable prices, perhaps to include inequality. , for example, or poverty or climate change.
And beyond that, the new appointees expected the prioritization of the jobs aspect of the term to suggest they might be more willing to tolerate higher inflation for a longer period, Pavlick wrote. in a note to customers. If the Omicron variant is more severe than expected, or if another new, more virulent variant emerges, it could cause the Fed to rethink its timing.
Write to Megan Cassella at [email protected]