Three Biden nominees would increase diversity of Fed board

WASHINGTON — President Biden on Friday announced the nominations of three people for the Federal Reserve’s Board of Governors, including Sarah Bloom Raskin, a former Fed and Treasury official, for the top regulatory slot and Lisa Cook, who would be the first Black woman to serve on the Fed’s board.

Biden also nominated Philip Jefferson, an economist, dean of faculty at Davidson College in North Carolina and a former Fed researcher. The three nominees, who will have to be confirmed by the Senate, would fill out the Fed’s seven-member board.

They would join the Fed as it undertakes the delicate task of raising its benchmark interest rate to try to curb high inflation, without undercutting the recovery from the COVID-19 pandemic recession. On Wednesday, the government reported that inflation reached a nearly four-decade high in December.

If approved, Biden’s picks would significantly increase the Fed’s diversity. Cook and Jefferson would be just the fourth and fifth Black governors in the Fed’s 108-year history. And for the first time, a majority of the board would consist of female appointees.

In late November, Biden also nominated Jerome H. Powell for a second four-year term as Fed chair and chose Lael Brainard, a Fed board member, to be the vice chair.

“This group will bring much needed expertise, judgment 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 said in a statement Friday.

Raskin’s nomination to the position of Fed vice chair for supervision — the nation’s top bank regulator — will be welcomed by progressive senators and advocacy groups. She is also viewed as someone committed to incorporating climate change considerations into the Fed’s oversight of banks.

A Harvard-trained lawyer, Raskin previously served on the Fed’s sevenmember board from 2010 to 2014. President Obama then chose her to serve as deputy Treasury secretary.

Raskin is likely to draw fire from critics for her progressive views on climate change. Two years ago, in an opinion column in the New York Times, she criticized the Fed’s willingness to support lending to oil and gas companies.

“The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries — not prop up and enrich dying ones,” Raskin wrote, referring to oil and gas providers.

On Thursday, Sen. Patrick J. Toomey (R-Pa.), the top Republican on the Senate Banking Committee, criticized Raskin for having “explicitly advocated that the Fed allocate capital by denying it to this disfavored sector.”

Cook has been a professor of economics and international relations at Michigan State University since 2005. She was also a staff economist on the White House Council of Economic Advisors from 2011 to 2012.

Cook is best known for her research on the effect of racial violence on African American invention and innovation.

Cook has also been an advocate for Black women in economics. In 2019, she cowrote a column in the New York Times that asserted that “economics is neither a welcoming nor a supportive profession for women” and “is especially antagonistic to Black women.”

Jefferson, who grew up in a working-class family in Washington, D.C., according to an interview with the American Economic Assn., has focused his research on poverty and monetary policy.

In a 2005 paper, he concluded that the benefits of a hot economy from the reduction in unemployment among lower-skilled workers outweighed the costs, including the risk that companies would adopt automation once labor grew scarce.