President Biden on Friday announced the nominations of three top Federal Reserve officials, lining up a full slate for the Fed Board of Governors.
Biden formally announced the nominations of former Treasury Department Deputy Secretary Sarah Bloom Raskin to serve as Fed vice chair of supervision and of Michigan State University professor Lisa Cook and Davidson College professor Philip Jefferson to serve as Fed board members.
If confirmed by the Senate, all three would join the Board of Governors to oversee its operations, help set U.S. monetary policy and control the Fed’s supervision and regulation of major banks. Raskin would lead the Fed’s regulatory agenda as the board’s vice chair of supervision, a position created by the 2010 Dodd-Frank financial reform law.
Biden’s latest picks, first reported Thursday night, followed his renomination of Fed Chairman Jerome Powell and appointment of Fed board member Lael Brainard to serve as vice chair in December.
“We are at a moment of historic economic progress alongside unique economic challenges as we work to drive our recovery forward. This is a moment that calls for sound, independent leadership from the Board of Governors at the Federal Reserve,” Biden said in a statement.
“That is why I am proud to nominate Sarah Bloom Raskin, Lisa Cook, and Philip Jefferson, who will bring a breadth of knowledge, experience and expertise to the Board of Governors.”
Raskin, Cook and Jefferson were long considered likely picks for three open positions on the Board of Governors, which includes up to seven members, three of which serve as chair, vice chair and vice chair of supervision.
Raskin, now a law professor at Duke University, served as deputy Treasury secretary and a Fed board member during the Obama administration. She was also commissioner of financial regulation for the state of Maryland and was considered a front-runner to serve as Treasury secretary under Biden.
Cook is a widely respected economics professor who served in the White House Council of Economic Advisers under former President Obama. She’s held research and leadership roles at Harvard University and Stanford University and visiting appointments at several regional reserve banks. She is currently a member of the Chicago Fed’s advisory board.
Jefferson, also the vice president for academic affairs at Davidson, was an economist for the Fed board and spent decades in several research and professorial positions. He is also an adviser to the Minneapolis Fed and former president of the National Economics Association.
Biden’s latest nominees would also mark several first for the Fed. Cook would be the first Black woman to join the Fed board if confirmed by the Senate, 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 just the fourth Black man to serve on the Fed board since its creation 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.”
Biden sought to strike a balance with his Fed picks despite pressure from progressives to ditch Powell and create a staunchly progressive majority at the central bank. The president said it was important to preserve 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 dramatically shift the course of the bank’s monetary policy, which is controlled by a committee including board members and the presidents of reserve banks. The Fed is expected to begin hiking interest rates as soon as March, with inflation at four-decade highs and the unemployment rate falling below 4 percent in December.
Even so, Biden’s new picks could heavily influence the Fed’s pending revamp of anti-redlining rules and its approach to climate-related financial risks.
“With these nominees, President Biden is showing the country what a Federal Reserve standing on the side of workers and their local communities looks like,” said Senate Banking Committee Chairman Sherrod Brown (D-Ohio), who will preside over Raskin, Cook and Jefferson’s confirmation hearings.
“We need leaders who will ensure that workers and their families reap the benefits of the economic growth they create, and who will not repeat past mistakes that led to a booming recovery for Wall Street, and a weak one for everyone else.”
Raskin is likely to face intense Republican skepticism over her views on how the Fed should treat the fossil fuel industry and banks who serve it, particularly after opposing efforts to include oil and gas companies in COVID-19 emergency lending programs in 2020.
“Former Fed Governor Raskin has a long history of distinguished government service,” Rep. Patrick McHenry (N.C.), the ranking Republican on the House Financial Services Committee, said in a statement.
“I encourage her to maintain the apolitical posture of previous Vice Chairs for Supervision, and to focus on the supervisory role while leaving social and fiscal policy making to Congress.”