Biden unveils three nominees for top Fed posts as central bank prepares to lift interest rates

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President Biden on Friday unveiled a trio of nominees for leadership roles at the Federal Reserve, which will increase diversity and give the central bank a more liberal lean as it prepares to raise interest rates for the first time in four years.

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The White House nominates Sarah Bloom Ruskin, Lisa Cook and Philip Jefferson to fill three seats on the Fed’s powerful board of governors. If confirmed, he would join Democrat Red Brainard, the lone Democrat on the seven-member board.

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This is his second go-around for Ruskin. The Duke professor was a member of the Fed’s board from 2010 to 2014 during the Obama administration and previously worked with current chairman Jerome Powell. Her husband is Jamie Ruskin, the US Representative of Maryland.

She has been named as the next vice president of oversight, making her the Fed’s top Wall Street cop. He is seen as a supporter of tougher bank rules and more climate-related regulations, but has already drawn opposition from some Republicans.

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Pat Tommy of Pennsylvania criticized Ruskin for writing earlier this week that the Fed should not encourage lending to oil and gas providers.

Cook and Jefferson, who are both black, are distinguished economists.

Cook was Biden’s economic advisor during the 2020 presidential campaign and served on an advisory board at the Chicago Federal Reserve. Jefferson is a former staff economist at the Fed and a current professor at Davidson College in North Carolina.

There are only three other African-American board members in the Fed’s 108-year history.

“We are in a moment of unique economic challenges as well as historic economic progress as we work to advance our recovery. This is a moment that calls for sound, independent leadership from the Board of Governors at the Federal Reserve,” President Joe Biden said in a statement.

“That’s why I’m proud to nominate Sarah Bloom Ruskin, Lisa Cook and Philip Jefferson, who will expand their knowledge, experience and expertise to the Board of Governors.”

Analysts say the new nominees will join the Fed at a critical time, but are unlikely to influence the Fed to change their current roadmap.

The central bank is phasing out a massive bond-buying program and is on track to raise interest rates in 2022 for the first time since the pandemic to counter the biggest rise in US inflation in nearly four decades.

The cost of living has increased by about 7% in the past year, thanks to heavy incentives from the central bank and the federal government.

The stimulus helped the economy accelerate and recover faster, but all-expenses also hit businesses’ ability to keep up with demand. The slowdown in the global flow of trade goods has added to the crisis.

What could affect the new nominees is the timing of the central bank’s attempt to wean the economy away from federal stimulus.

They may also advocate for tougher fiscal rules or push the Fed to place greater emphasis on inequality and climate change in its decisions.

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