US President Joe Biden is to nominate three people for the US Federal Reserve’s Board of Governors, including Sarah Bloom Raskin, a former Fed and US Department of the Treasury official, for the top regulatory slot, a source said on Thursday.
Biden is also to also nominate Phillip Jefferson, an economist, dean of faculty at Davidson College in North Carolina and a former Fed researcher, and Lisa Cook, a professor of economics and international relations at Michigan State University since 2005, said a person familiar with the decision, who was not authorized to speak on the record.
The three nominees, who would have to be confirmed by the US Senate, would fill out the Fed’s seven-member board.
The nominees would join the Fed at a particularly challenging time in which the central bank is to undertake the delicate task of raising its benchmark interest rate to try to curb high inflation without undercutting a recovery from a recession amid the COVID-19 pandemic.
On Wednesday, the US government reported that inflation last month reached a four-decade high.
Inflation has become the US economy’s most serious problem, a burden for millions of American households and a political threat to the Biden administration.
Raskin’s nomination to the position of Fed vice chair for supervision — the nation’s top bank regulator — would be welcomed by progressive senators and advocacy groups, who see her as likely to take a tougher approach to bank regulation than Randal Quarles, who stepped down from that post last month.
She is also viewed as someone committed to incorporating climate change considerations into the Fed’s oversight of banks.
However, she has already drawn opposition from other senators.
A Harvard-trained lawyer, Raskin, 60, previously served on the Fed’s seven-member board from 2010 to 2014.
Former US president Barack Obama chose her to serve as deputy treasury secretary, the No. 2 job in the department.
As Fed governors, Raskin, Cook and Jefferson would vote on interest-rate policy decisions at the eight meetings each year of the Fed’s policymaking committee, which also includes the 12 regional Fed bank presidents.
Raskin’s first term as a Fed governor followed her work as Maryland’s commissioner of financial regulation.
Before her government jobs, Raskin had worked as a lawyer at Arnold & Porter, a Washington firm, and as a managing director at the Promontory Financial Group.
Kathleen Murphy, chief executive officer of the Massachusetts Bankers’ Association, worked with Raskin when Raskin was Maryland’s banking regulator from 2007 to 2010 and Murphy led the Maryland bankers’ group.
Murphy said that the state’s financial industry regarded her as a “strong regulator, but a fair regulator.”
“She has always had a very collaborative approach,” Murphy said. “She wanted to make sure all the voices were at the table when decisions were made.”
Still, Raskin is likely to draw fire from critics for her views on climate change and the oil and gas industry.
Two years ago, in an opinion column in the New York Times, she criticized the Fed’s willingness to support lending to oil and gas companies as part of its efforts to bolster the financial sector in the depths of the pandemic recession.
“The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries — not prop up and enrich dying ones,” Raskin wrote, referring to oil and gas providers.
Cook was a staff economist on the White House Council of Economic Advisers from 2011 to 2012 and was an adviser to the transition team for the then-incoming Biden administration on the Fed and bank regulatory policy.
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