President Biden selected Sarah Bloom Raskin, seen above, as the Federal Reserve’s top banking regulator.
Yuri Gripas/Reuters/Alamy
President Joe Biden has tapped Sarah Bloom Raskin to serve as the Federal Reserve’s top banking regulator and will appoint Lisa Cook and Philip Jefferson to two open seats on the central bank’s Board of Governors.
The long-expected announcement, made official in a news release Friday morning, rounds out Biden’s bevy of nominations to the central bank, and it signals both a progressive shift and a commitment to diversity. All three have previous professional experience with the Fed.
If they are confirmed, four Democrats will hold seats on the Board of Governors, potentially signaling a tougher approach on Wall Street moving forward.
Bloom Raskin has extensive policy-making experience, including as former deputy secretary of the Treasury Department during the Obama administration, as a governor of the Federal Reserve Board, and as a member of the central bank’s rate-setting arm, the Federal Open Market Committee.
A law professor at Duke University and a distinguished fellow at the school’s Global Financial Markets Center, Bloom Raskin has called extensively in recent months on U.S. financial regulators to play a larger role addressing climate change. Her appointment signals a willingness by the Biden administration to turn to the central bank to take action on the issue, Fed watchers say, particularly as the president’s legislative climate proposals stall in Congress.
Cook, an economics and international relations professor at Michigan State University, served on the Council of Economic Advisers during the Obama administration and as deputy team lead with the Biden-Harris transition team in 2020. She has also served stints with the Federal Reserve Banks of New York, Chicago, Philadelphia, and Minneapolis. If confirmed, she will be the Fed’s first Black female governor in its history.
She and Jefferson together will be the fourth and fifth Black members of the board.
Jefferson, the current vice president for academic affairs, dean of the faculty and endowed economics professor at North Carolina’s Davidson College, also has extensive Fed experience—both with the Board of Governors and the Bank of New York .
With the appointments of Bloom Raskin and Cook, women will for the first time hold the majority of seats, alongside Lael Brainard and Michelle Bowman.
In a statement announcing the nominations, Biden said the appointees 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.”
“They will continue the important work of steering us on a path to a strong, sustainable recovery, while making sure that price increases do not become entrenched over the long term,” the statement added.
The addition of three new Democratic members might not immediately indicate major policy changes at a time when most board members are clearly signaling they want to move quickly to tackle inflation, says Stephen Pavlick, the head of policy at Renaissance Macro Research.
But particularly in the near term, Pavlick adds, the new appointees could focus less on changing the direction of monetary policy and more on using the Fed’s tools to push the central bank into areas beyond its dual mandate of full employment and stable prices—perhaps to include inequality, for example, or poverty or climate change.
And beyond that, the new appointees’ expected prioritization of the employment aspect of the mandate suggests “they may be more willing to tolerate higher inflation for a longer period,” Pavlick wrote in a note to clients. “If the Omicron variant is more severe than most expect, or if another new more virulent variant emerges, it could cause the Fed to rethink its timeline.”
Write to Megan Cassella at [email protected]
