President Biden announced the nominations of three top Federal Reserve officials on Friday, completing a full slate for the Fed’s board of governors.
Biden formally announced the nominations of former Treasury Department Deputy Secretary Sarah Bloom Raskin as Fed vice chair of supervision, as well as Michigan State University professor Lisa Cook and Davidson College professor Philip Jefferson as Fed governors.
If confirmed by the Senate, all three would join the Fed’s board of governors to oversee its operations, help set monetary policy in the United States, and control the Fed’s supervision and regulation of major banks. Raskin would lead the Fed’s regulatory agenda as vice chair of supervision on the board, a position created by the Dodd-Frank financial reform law in 2010. Biden’s latest selections, first reported Thursday night, come on the heels of his re-nomination of Fed Chair Jerome Powell and appointment of Fed Governor Lael Brainard to serve as vice chair in December.
“As we work to propel our recovery forward, we are experiencing historic economic progress as well as unique economic challenges. This is a time when the Federal Reserve Board of Governors must provide sound, independent leadership “In a statement, Biden said.
“That is why I am proud to nominate Sarah Bloom Raskin, Lisa Cook, and Philip Jefferson to the Board of Governors, who will bring a wealth of knowledge, experience, and expertise.” Raskin, Cook, and Jefferson have long been considered likely candidates for three open seats on the Fed’s board of governors, which has up to seven members, three of whom serve as chair, vice chair, and vice chair of supervision.
Raskin, who is now a Duke University law professor, served as deputy Treasury Secretary and a Federal Reserve governor during the Obama administration. She was also the commissioner of financial regulation for the state of Maryland and was widely regarded as a front-runner to succeed Biden as Treasury Secretary.
Cook is a well-known economics professor who served on former President Barack Obama’s White House Council of Economic Advisors. She has held research and leadership positions at Harvard and Stanford Universities, as well as visiting appointments at several regional reserve banks. She currently serves on the advisory board of the Chicago Fed.
Jefferson, who is also the vice president for academic affairs at Davidson, worked as a Fed board economist and held a variety of research and professorial positions for many years. He is also a Minneapolis Fed advisor and a former president of the National Economics Association.
Biden’s latest nominees would be a number of firsts for the Fed. If confirmed by the Senate, Cook would be the first Black woman on the Fed board, and women would make up a majority on a fully-seated Fed board for the first time if she, Raskin, and Brainard are all confirmed. Jefferson would be only the fourth Black man to serve on the Fed’s board of directors since its inception in 1913.
“Together with Chair Powell and Dr. Brainard,” Biden said, “this group will bring much needed expertise, judgement and leadership to the Federal Reserve while at the same time bringing a diversity of thought and perspective never seen before on the Board of Governors.”
Despite pressure from progressives to replace Powell and create a firmly progressive majority at the Fed, Biden sought to strike a balance with his Fed nominees. The president stated that it is critical to maintain continuity at the Fed as it fights high inflation while also steering the bank toward a more inclusive mindset.
Fed experts do not expect Biden’s nominees to significantly alter the bank’s monetary policy, which is overseen by a committee comprised of Fed board members and reserve bank presidents. With inflation at four-decade highs and the unemployment rate falling below 4% in December, the Fed is expected to begin raising interest rates as early as March. Nonetheless, Biden’s new appointments could have a significant impact on the Fed’s upcoming overhaul of anti-redlining rules as well as its approach to climate-related financial risks.
Raskin is likely to face strong Republican opposition to her views on how the Fed should treat the fossil fuel industry and the banks that serve it, especially after opposing efforts to include oil and gas companies in COVID-19 emergency lending programs in 2020.