Joe Biden seeks to reshape the Fed with a historically diverse slate

The president of the United States, Joe Biden, proposed on Friday the former governor of the Federal Reserve (Fed), Sarah Bloom Raskin, for the key position of regulation of the Fed and two black economists -Lisa Cook and Philip Jefferson- to be part of its board of directors, in what would represent a historical demographic revision of the most powerful central bank in the world.

The appointments, if confirmed by the Senate, would round out the ranks of a seven-member panel that wields enormous influence over the world’s largest economy and make the Fed leadership the most racially and gender-diverse in its membership. 108 years of history.

The announcements, which follow Biden’s previous nominations of Jerome Powell for a second four-year term as Fed chair and Governor Lael Brainard as vice chair, come as Biden’s own plans to restart the economy post-pandemic of COVID-19 have run into an unexpected spike in inflation.

This gives you the chance to make a lasting mark on a body that sets economic policies – interest rates in particular – that impact the world.

“We find ourselves at a time of historic economic progress alongside unique economic challenges as we work to fuel our recovery,” Biden said in a statement.

“This is a moment that requires strong and independent leadership from the Federal Reserve Board of Governors. That is why I am proud to appoint Sarah Bloom Raskin, Lisa Cook and Philip Jefferson, who will bring a wide range of knowledge, experience and expertise to the Board of Governors.”

The appointments immediately drew criticism from the top Republican member of the Senate Banking Committee, signaling a potentially rocky and partisan appointments process ahead in a legislative body that Democrats control solely by virtue of Vice President Kamala Harris’s dual role. as President of the Senate.

“I have serious concerns” about Raskin, Sen. Pat Toomey of Pennsylvania said in a statement, adding that he believes she would try to prevent banks from lending to oil and gas companies and walk away from the two congressional terms they run. the main mission of the Fed: maximum employment and price stability.

Brainard, nominated for the Fed’s No. 2 job, was repeatedly asked by Toomey and other Republicans about her support for climate risk research during her nomination hearing Thursday. He also signaled his skepticism toward Cook and Jefferson, saying he will “closely examine” whether they have “the experience, judgment and political views necessary to serve as Fed governors.”

Cook, a professor of economics and international relations at Michigan State University, would be the first black woman to serve as Fed governor. Jefferson, a professor and senior administrator at Davidson College in North Carolina, would be the fourth black man to serve as Fed governor. join the panel and the first in more than 15 years.

Biden’s election would mean that the seven-member Board of Governors would include four women, also for the first time. Currently, the Fed Board of Governors has only five members, all of them white, although that number will be reduced to four – two men and two women – after Vice Chairman Richard Clarida leaves the Board on Friday, as reported. had previously announced.