The economist and lawyer Sarah Bloom Raskin is to become Vice President of the US Federal Reserve and the country’s top bank supervisor. As US media reported unanimously on Friday, President Joe Biden also wants to appoint economists Lisa Cook and Philip Jefferson to the Fed leadership. This would mean that the seven-member board would be complete again for the first time in a long time. However, the Senate still has to approve the appointment of the three candidates.
With the nominations, Biden is responding to calls from his party to make central bank leadership more female, more diverse, and more pro-Democrats. If Raskin and Cook are confirmed, for the first time there will be more women than men on the board with Lael Brainard, Michelle Bowman and the two newcomers. Cook would also be the first black woman and Jefferson only the fourth black man to serve on the board. They would be assisted by Fed Chair Jerome Powell and Board member Christopher Waller, with Powell’s reappointment as chairman and Brainard’s promotion to second vice president also awaiting Senate approval.
Given the narrow majority in the Senate, it is still unclear whether Biden will be able to enforce his personnel tableau. Raskin in particular could have a hard time with many Republican and possibly also some more conservative Democratic senators, because she not only stands for stricter regulation of banks. Rather, she wants to align monetary policy more closely with climate and social policy goals such as poverty reduction. In May 2020, she caused a stir when she criticized Congress and the Federal Reserve for also providing “dying industries” such as the oil and gas sector with emergency corona aid. The 60-year-old, who currently teaches law at Duke University in North Carolina, served as a stint as deputy Treasury secretary under President Barack Obama and previously served on the Fed board as a regular member.
Unlike Raskin’s application, Jefferson’s nomination also met with approval from economists close to the Republicans. Kevin Hassett, former chief economic adviser to President Donald Trump, said he would “strongly support” the candidacy of the economist and former fellow professor. Jefferson currently teaches at Davidson College in North Carolina and has authored books on topics such as poverty and social inequality. Cook, who teaches economics at Michigan State University, also focuses her research on the question of how inequality slows down economic growth. Republicans also have reservations about their appointment.