Fed: Biden nominates Philip Jefferson as Fed vice chair, taps Adriana Kugler to become first Latino governor

President Biden announced two major nominations to the Federal Reserve Board on Friday, the first for a Latino governor and Second black vice president at the Fed.

The White House named Philip Jefferson, who was the federal governor last year, as the no. 2 will be promoted to the post. Biden was also nominated Adriana D. Kugler, now the US managing director of the World Bank, for a seat as governor. Those moves will fill a vacancy left at the central bank after former Vice Chairman Lael Brainard moved to the White House. The results will further efforts by Democrats to make the 109-year-old central bank more reflective of the country it serves.

“These nominees understand that this job is not a partisan one, but is critical to maximizing employment, maintaining price stability, and overseeing our nation’s many financial institutions,” Biden said in a statement. “I am confident these nominees will help build on the historically strong economic recovery we have enjoyed under my administration.”

Through a Fed spokeswoman, Jefferson declined to comment, and Kugler did not respond to a request for comment.

Biden will renominate Fed Governor Lisa Cook for another full, 14-year term. When Cook was confirmed to the board last year, he filled a seat with an expiring term that ends in January 2024. Acclaimed economist Cook, 58, is the first black woman to join the central bank’s board.

With new candidates, Biden is trying to assemble the most diverse Fed in history

Kugler, 53, has been the World Bank’s managing director for the Americas for the past year and has had a long career as a development and labor economist. He was Chief Economist in the Department of Labour He was also a professor of public policy and economics at Georgetown University from 2011 to 2013 and for more than a decade.

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His appointment was Sen. It comes after a long pressure campaign by Robert Menendez (DN.J.), who criticized the Biden administration for not yet naming a Latino economist to the central bank. He has also criticized the lack of Latino leadership within the central bank’s regional banks.

In a statement, Menendez said Kugler’s appointment “inaugurates a new chapter at the Federal Reserve, which has not had a Latino or a Latino at the top of its leadership for 109 years.”

“By elevating Philip Jefferson to vice president, renominating Lisa Cook to the Board of Governors, and appointing Adriana Kugler as the first Hispanic to serve on the Board of Governors, President Biden is signaling the hopes and dreams of black and Latino Americans are central to America’s promise,” Menendez said.

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The White House was considering other potential candidates for the vice presidency, including Harvard economist Karen Tynan and Northwestern economist Janice Eberly. But people close to the negotiations said Menendez, who sits on the Senate Banking Committee and votes to confirm Fed nominees, is committed to pushing for Latino representation and has compiled a list of potential candidates for the White House. Kugler is not on that list.

Before he joined Fed. Jefferson, 61, was an economist at Davidson College. His Research Focuses on inequality, how business cycles affect poverty rates and the role of education as a shield against unemployment. He was the fourth black man appointed to the Fed’s board and was confirmed with bipartisan support.

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“As we know from experience, the pursuit of maximum employment and stable prices fosters an economic environment characterized by a dynamic labor market, entrepreneurship, private savings and investment, and sustained growth in consumption and production over the long term,” Jefferson said. said At his confirmation hearing in February 2022. “Furthermore, long-term inclusive prosperity requires careful attention to the safety and soundness of the Federal Reserve Banks and the stability of the financial system.”

In many ways, the vice-chair role is to reinforce the message and agenda set by the chair. If confirmed, Jefferson President Jerome H. Will work closely with Powell. The central bank raised interest rates for the 10th time in 14 months this week. But a mix of good and bad economic news — and the prospect of a disastrous U.S. government default — have left leaders at the Fed uncertain about their next move.

Inflation is still high, and the economy has slowed more than expected at the start of the year. This spring’s banking crisis prompted banks to pull back on lending, leaving many small businesses struggling to grow or plan for the future.

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