Joe Biden on Friday officially nominated Philip Jefferson to serve as the next vice-chair of the Federal Reserve in his latest step to reshape the top ranks of the US central bank.
The US president also tapped Adriana Kugler, an economist who represents the US on the board of the World Bank, to become a Fed governor. If confirmed, she would be the first Latina to become a top policymaker at the Fed.
Additionally, Biden said he would nominate Lisa Cook for a full 14-year term as a Fed governor, after she became the first black woman to hold the position in the Fed’s history following her confirmation in May 2022.
In a statement, the president lauded Jefferson and Cook for bringing “valuable insight, expertise, and continuity to the Fed at a critical time for our economy and families across the country”. Jefferson will fill a spot left vacant by Lael Brainard, who departed the Fed in February after serving as second-in-command for less than a year to join the Biden administration as the president’s top economic adviser.
Biden highlighted Kugler’s “deep expertise” on the jobs market, especially youth employment. She formerly served as the chief economist of the US Department of Labor from 2011 to 2013.
“These nominees understand that this job is not a partisan one, but one that plays a critical role in pursuing maximum employment, maintaining price stability, and supervising many of our nation’s financial institutions,” he said.
Sherrod Brown, the Democratic chair of the powerful Senate banking committee, which will manage the confirmation process, called the nominations “historic”.
Senator Bob Menendez, a Democrat from New Jersey who has long advocated for more diversity in top positions at the Fed, applauded the announcement on Friday. “We are finally giving Latinos, all 62mn of us who call this country home, a seat at the table where the most consequential decisions on monetary policy are made,” he said in a statement.
Some Republicans have criticised the Fed for expanding its territory beyond its congressional mandate, such as climate change. Last year, Biden’s first pick for vice-chair for supervision, Sarah Bloom Raskin, was forced to withdraw from the nomination process after losing support for her previous calls for regulators to more proactively address financial risks related to climate change. Biden eventually tapped Michael Barr, a former Treasury official.
The rejigging of the most senior positions at the Fed comes at a challenging moment for the central bank, which is confronting both stubbornly high inflation and bouts of financial instability, after the failure of multiple banks in recent months.
Jefferson, Cook and Kugler, if confirmed, will be instrumental in determining the future direction of the Fed’s policy path. The central bank has already raised its benchmark rate more than 5 percentage points in a little over a year. Recession fears have risen in recent months, fuelling bets that the Fed will slash rates later this year.