What We Get With President Biden’s Three Federal Reserve Nominees
As expected, the White House announced last night President Biden intends to nominate three individuals to open Federal Reserve Governorships. The three nominees are:
Sarah Bloom Raskin for Vice Chair for Supervision
Lisa Cook for a Governorship
Philip Jefferson for a Governorship
Upon their confirmation, this will make this the most diverse Federal Reserve Board ever. We expect both Cook and Jefferson to have reasonably easy confirmation hearings. Raskin will have a tougher time as several Republican Senators are already speaking out over their concerns over her views of regulation. But we expect at this point she will be confirmed. Here is a quick snapshot of the three nominees:
Sarah Bloom Raskin: A former Deputy Treasury Secretary during the Obama Administration (2013-3016), Raskin (60) also served as a Federal Reserve Board Governor in the early years of the Obama Administration (2010-2013).
As the incoming chief bank regulator, Raskin is expected to be much tougher on banks in terms of regulation and enforcement. As noted above, we believe she will garner the most opposition in the Senate of the three nominees. Big banks are likely not happy today with her nomination. She has the full support of Senator Elizabeth Warren (D-MA) and other Progressive Democrats, who have long called for stricter oversite of banks. Already, Republican Senators are expressing concern over her view of the role of the Fed concerning climate change. Raskin has been outspoken about the need for banks being required by regulation to take tougher stances in the fight against climate change – including curbing lending to fossil-fuel intensive companies and the oil/gas industry overall.
Of note, in an opinion piece in September 2021, Raskin laid out her views on how regulators should deal with climate risk. She argued, “U.S. regulators will need to leave their comfort zone and act early before the problem worsens and becomes even more expensive to address.”
Raskin is a graduate of Amherst College and Harvard Law School. Currently, she is a law professor at Duke University School of Law. Before her government service, she was at the law firm of Arnold & Porter, then a counsel at the U.S. Senate Banking Committee.
She then was named Chief Financial Regulator of the State of Maryland before becoming a professor at the University of Maryland School of Law before moving on to Duke. She is married to Congressman Jamie Raskin (D-MD), who was lead manager of the 2021 Impeachment trial of President Trump.
Lisa Cook: A distinguished professor of economics and international relations at Michigan State University, Cook would be the first African-American woman to ever serve on the Federal Reserve Board.
Part of Cook’s academic focus has been on racial discrimination’s role in the economy. In 2020, she wrote a well-received column for the New York Times arguing discrimination has a much more negative impact on the whole economy, not just those who are its direct victim. Senate Banking Committee Chair Sherrod Brown (D-OH) strongly supported her nomination, suggesting she will have an easy confirmation.
A Marshall Scholar who attended Spelman College and then went on to earn a second B.A. in philosophy, politics, and economics from Oxford University. Cook then earned a Ph.D. in economics from the University of California, Berkley. She has been on the faculty at Harvard University’s Kennedy School of Government, Deputy Director for Africa Research at the Center for International Development at Harvard, and National Fellow at Stanford University.
In 2012-2013 Cook served on the White House Council of Economic Advisors. She also served on the Biden-Harris Transition team advising the Federal Reserve, Banking, and Securities Regulators. She is also a regular guest columnist for the New York Times.
Phillip Jefferson: A well-known and highly respected economist and academic, Jefferson is currently the Vice President for Academic Affairs, Dean of Faculty, and Paul B. Freeland Professor of Economics at Davidson College.
Jefferson knows the Fed well, having served at the Federal Reserve twice – first as a research assistant in the fiscal analysis section from 1983-1985 and then again as an economist in the monetary affairs division in 1996-1997. He has also held professorships at Columbia University and Swarthmore College. Born and raised in Washington DC, he attended Vassar College, the London School of Economics, and went on to earn his doctorate at the University of Virginia.
Jefferson is seen as a leading authority on poverty and inequality, having conducted extensive research and written numerous books and articles on the subject.
On the news of his nomination, former President Trump’s Chair of the Council of Economic Advisors, Kevin Hassett, said Jefferson is “a first-class scholar and former Fed economist who is supremely well-qualified to be a governor. He will very likely receive broad bipartisan support in the Senate.”
We will update you on their confirmation process. In the meantime, please let us know if you have any ques