Economist Lisa Cook Will Be First Black on Fed Board

The United States Senate confirmed economist Lisa D. Cook on the Federal Reserve’s board of governors on Tuesday (10), making her the first black woman to hold that political position.

The confirmation came after Vice President Kamala Harris broke a 50-50 tie in the Senate, taking the Biden administration one step closer to overhauling the central bank’s leadership team.

Cook, an economist at Michigan State University who has researched racial disparities and labor markets, was nominated alongside a list of other officials — the White House had the opportunity to fill two open governorships and choose a new president, vice president, and vice president. general president and vice president of supervision of the bank.

Lael Brainard, chosen by Chairman Joe Biden as Fed vice chairman, is the only one of his nominees to the bank who has already been confirmed.

Biden also appointed Philip N. Jefferson, academic economist and administrator at Davidson College, and reappointed Jerome Powell as chairman of the Fed. Its initial nominee for the Fed’s oversight vice presidency, Sarah Bloom Raskin, withdrew from consideration amid Republican and partially Democratic opposition. Michael S. Barr was most recently nominated for the position and is awaiting a nomination hearing.

If these additional nominees are confirmed, Biden will have nominated or reappointed five of the Fed’s seven governors. The Fed is independent of policy, so these appointments are the main way the White House can shape the future of monetary policy, which is used to keep inflation stable and employment high.

Governors on the Fed Council in Washington hold constant votes on monetary policy and oversee the country’s biggest banks. They set interest rates to guide the economy along with 12 regional central bank governors, five of whom have the right to vote at any given time.

The Fed is now battling stubbornly high inflation, and Biden’s nominees to the board are likely to follow the course the bank has already begun to chart. The Fed raised interest rates at its March meeting and approved an even bigger hike at last week’s meeting. It will also imminently begin to shrink its balance sheet in an attempt to raise long-term interest rates and slow the economy further.

By making borrowing more expensive, the Fed is trying to slow down spending and hiring, which could allow inflation to moderate over time as supply catches up with demand. During their hearings, all the nominees made it clear that they are committed to reducing inflation.

“High inflation is a serious threat to a long and sustained expansion, which we know raises the standard of living for all Americans and leads to widespread and shared prosperity,” Cook said during his testimony. “That’s why I’m committed to keeping inflation expectations well-anchored.”

Cook holds a PhD in economics from the University of California at Berkeley. She has a history of mentoring younger economists, including through the American Economic Association’s Summer Program, which aims to increase diversity in the field of economics.

Translated by Luiz Roberto M. Gonçalves