Economist becomes first Black woman to serve on central bank’s board
By Nick Timiraos from the Wall Street Journal.
The Senate voted to confirm Lisa Cook to the Federal Reserve, making her the first Black woman to sit on the central bank’s board.
Ms. Cook was approved Tuesday on a party-line vote, 51-50, with Vice President Kamala Harris breaking a tie. Ms. Cook is the second Fed nominee of President Biden to win Senate confirmation, following Fed governor Lael Brainard, who was approved as the central bank’s vice chairwoman last month.
Ms. Cook’s confirmation Tuesday evening paves the way for lawmakers to confirm two additional picks this week, including Jerome Powell, whose four-year term as chairman expired in February. He has been serving in an acting capacity since then and is poised to win bipartisan support for a second term as chairman. Philip Jefferson, an economist at Davidson College, is a Fed board nominee who won unanimous support from the Senate Banking Committee in March.
An effort to advance Ms. Cook’s nomination stalled last month because of absences on the Democratic side of the aisle related to Covid-19. Her term runs through January 2024.
Ms. Cook served as an economist on the staff of the Council of Economic Advisers during the Obama administration. Her research has focused on policies that promote broad economic opportunity, particularly for racial minorities and women.
Some Republicans suggested at Ms. Cook’s February confirmation hearing that she lacked sufficient experience in macroeconomics and monetary policy, a claim she countered by highlighting her research experience and work at the Treasury Department and White House.
The nominations of Ms. Cook and Mr. Jefferson would allow Mr. Biden to put his stamp on the central bank and fulfill promises made to improve the diversity of its top leadership. Not including Ms. Cook, Mr. Jefferson would be the fourth Black governor and the first since 2006.
Mr. Biden has also nominated Michael Barr, a law professor who served as a top Treasury Department official in the Obama administration, to serve as the Fed’s vice chair of supervision.
Fed officials are focused on raising interest rates to cool down demand and slow economic growth and inflation. The Fed last week approved an increase of a half-percentage point in its policy rate, to a range between 0.75% and 1%, and Mr. Powell signaled similar moves were likely to follow at policy meetings in June and again in July.
“While I’ll never interfere with the Fed’s judgments, decisions, or tell them what they have to do—they’re independent; they’re independent—I believe that inflation is our top economic challenge right now, and I think they do too,” Mr. Biden said Tuesday.
Some analysts have speculated that the new governors might favor less-aggressive rate increases, but they are unlikely to slow the Fed from advancing a faster pace of tightening as long as inflation is running well above the central bank’s 2% target. Ms. Cook and Mr. Jefferson said at their Senate appearances in February that tackling high inflation should be a central-bank priority.
The Fed’s governors are traditionally the most consensus-oriented members of an already consensus-oriented rate-setting committee. “The new additions will likely adapt more to the existing institution rather than vice versa,” said Tim Duy, chief U.S. economist at the research firm SGH Macro Advisors.
If inflation shows signs of slowing to an annual rate below 3%, the central bank would face a more spirited debate over how and when to moderate the pace of rate increases.