Biden to appoint three new Fed officials | Breaking News Updates

Biden to appoint three new Fed officials

| Breaking News Updates | News Today

President Biden plans to appoint three new Federal Reserve officials as he seeks to replenish the central bank at a critical economic time, people familiar with the matter said Thursday.

If confirmed, his choices would constitute the most diverse board of directors of the Fed in the history of the institution.

The White House plans to appoint Lisa Cook, an economist at Michigan State University who has studied racial disparities and labor markets, and Philip Jefferson, economist and administrator at Davidson College, to open seats on the Fed’s board of governors. Ms. Cook and Mr. Jefferson are both black.

Mr Biden will also appoint Sarah Bloom Raskin as the Fed’s vice chairman for oversight, a post created to help oversee the nation’s largest banks after the 2008 financial crisis.

Mr Biden had previously appointed Jerome H. Powell for a second term as Fed chairman and now governor Lael Brainard as central bank vice chairman. If confirmed in their positions, the Fed’s seven-person board would include four women, one black man, and two white men – the most diverse team in the Fed’s 108 years of existence. .

The administration had promised to make the Fed – historically dominated by white males – more like the public it serves, and prominent lawmakers have insisted the focus be on tighter financial regulation. The choices seek to deliver along these dimensions.

Ms Raskin, who served as Fed governor during the Obama administration, is used to advocating for tighter banking supervision and is said to usher in an era of tighter rules for financial titans global, a priority of some powerful. Democrats in Congress.

If confirmed, Ms Raskin would be tasked with determining the need for new financial regulations, enacting existing rules, and managing large banks of global significance through their annual health checks, commonly referred to as stress tests.

Ms Raskin would succeed Randal K. Quarles, who was appointed by former President Donald J. Trump and criticized some of the rules imposed on banks after the 2008 financial crisis. As vice president, Mr Quarles instituted a number of regulatory and supervisory adjustments that made supervision less onerous for banks, and critics argued weakened financial rules.

Mr. Quarles’ term as vice president expired in October and he left the Fed at the end of December.

Ms Raskin, a Harvard-trained lawyer who studied economics as an undergraduate at Amherst College, has spent time in the private sector, including as Managing Director of Promontory Financial Group, a consulting firm that advising clients on financial matters and specializing in regulatory compliance, in the early 2000s. She is a former Assistant Secretary in the Treasury Department, where she focused, among other things, on the cybersecurity of the financial system. She also spent several years as the Commissioner of Financial Regulation of Maryland.

She is a professor at Duke University Law School and is married to Representative Jamie Raskin, a Democrat from Maryland.

If confirmed in this post, Ms Raskin will face a number of pressing issues. The vice president of oversight is the Fed’s primary link with banks and markets, a role that will become increasingly important as the central bank considers issuing a digital currency. The vice president will need to navigate new technologies, like stablecoins and cryptocurrencies, and assess what that means for banks.

The Fed is developing climate risk scenarios to judge banks’ exposure, which the vice president of supervision will be heavily involved in. And the person will need to work with other regulators from the Financial Stability Oversight Council – an interagency group focused on protection against systemic financial risks – to address the weaknesses in money market funds and other financial instruments that the pandemic has brought to bear. naked.

Mr Biden’s other choices for the Fed would also enter their jobs at a difficult time, as unemployment drops rapidly and inflation remains high, but millions of former workers are still out of their jobs.

The Fed is pondering how quickly it will respond by removing support from the economy, and all governors are constantly voting on monetary policy, giving new choices a say in the matter.

Dr. Cook is well known for her work to improve diversity in economics, most notably through the American Economic Association’s summer program, which helps prepare undergraduates for potential careers in the field.

She attended Spelman College at the University of Oxford and obtained a doctorate in economics from the University of California at Berkeley. She was an economist on the White House Council of Economic Advisers under President Barack Obama.

She hasn’t spoken much publicly about her monetary policy philosophy, although she has spoken favorably on keeping the Fed independent from politics. Her published work examines a wide range of topics: her doctoral thesis focused on credit markets in Tsarist and post-Soviet Russia, while some of the work for which she is most famous focused on mortality and race, segregation and lynching.

Dr Cook is an academic focused on macroeconomics, but “she’s not traditional – she’s looked at what sometimes goes wrong with the economy,” said Julia Coronado, founder of research firm MacroPolicy Perspectives, in an interview. before the choice is announced. “He’s someone who can get by, I think, in this room.”

Mr. Jefferson worked as a research economist on the board of the Fed and studied at the University of Virginia and Vassar College. He has written on the economics of poverty and his research has investigated whether a monetary policy that fuels investments with low interest rates helps or hurts less educated workers.

“My results suggest that opportunities are starting to open up for them as the job market tightens,” he said in an interview with the Minneapolis Fed in 2018.

He also spoke candidly about his experience as a minority in economics.

“During my graduate studies at the University of Virginia, I was the only African American in the program the entire time there,” he said in that 2018 interview, noting that it had follow-up in his professional meetings. “It has been a long and lonely road professionally. “

And he said the economy needs more diverse voices.

“We have to be seated around the table,” he said. “I think it’s critically important for public policy that we hear voices that represent diversity.”

With the new slate of candidates, what is arguably the main decision-making body of the global economy will become much more diverse in terms of race and gender.

There were briefly three women on the board in the early 1990s, and again in the 2010s. The Fed has had three black members on the board in its history, all men, and none of them. they only sat on the board at the same time.

It’s unclear how the revamped board might alter the current monetary policy debate, which could involve some tough choices about how quickly to slow down an economy struggling with rapidly rising prices. The Fed has indicated that it is ready to raise interest rates, which could stifle inflation but also slow the labor market and wage growth.

Mr. Powell, the chairman of the Fed, pointed out this week that achieving full employment – a goal the Fed has emphasized in recent years as a means of fostering inclusion and opportunity in the economy – depends on maintaining price stability.

“If inflation becomes too persistent, if these high levels of inflation become entrenched in our economy and in the thinking of people, then inevitably it will lead to a much stricter monetary policy on our part, and it could lead to a recession, and that would be bad for workers, ”Powell said during his testimony to lawmakers on Tuesday.

Local News Fox news Biden to appoint three new Fed officials

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button