President Biden on Friday announced two key nominations to the Federal Reserve Board, naming the first Latina governor and second Black vice chair at the central bank.
The White House would elevate Philip Jefferson, who became a Fed governor last year, to the No. 2 role. Biden also nominated Adriana D. Kugler, now the U.S. executive director of the World Bank, to a seat as governor. Those moves would fill the Fed's remaining vacancy after former vice chair Lael Brainard moved to the White House. And the decisions would further Democrats' attempts 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 one that plays a critical role in pursuing maximum employment, maintaining price stability, and supervising many of our nation's financial institutions," Biden said in a statement. "I am confident these nominees will help build upon the historically strong economic recovery we have had under my Administration."
Through a Fed spokesperson, Jefferson declined to comment, and Kugler did not respond to a request for comment.
Biden will also renominate Fed governor Lisa Cook to another full, 14-year term. When Cook was confirmed to the board last year, she filled a seat with an unexpired term that ends in January 2024. A renowned economist, Cook, 58, is the first Black woman to join the Fed board.
Kugler, 53, has been the World Bank's executive director for the United States for the past year and has had a long career as a development and labor economist. She was chief economist at the Labor Department from 2011 to 2013 and has also been a professor of public policy and economics at Georgetown University for more than a decade.
Her nomination comes after a lengthy pressure campaign by Sen. Robert Menendez, D-N.J., who has criticized the Biden administration for not naming a Latino economist to the Fed until now. He has also criticized the lack of Latino leadership within the Fed's regional banks.
In a statement earlier, a spokesperson for Menendez did not comment specifically on Kugler or Jefferson but said the senator's "hope is that the Administration does in fact move forward with making the historic decision to nominate a Latina or Latino to the Federal Reserve Board of Governors."
The White House had been considering other potential nominees for the vice chair role, including Harvard economist Karen Dynan 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, was firm in pushing for Latino representation and compiled a list of potential candidates for the White House. Kugler was not on that list.
Before he joined the Fed, Jefferson, 61, was an economist at Davidson College. His research has focused 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 board and was confirmed with bipartisan support.
"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 saving and investment, and sustainable growth in consumption and production over the longer run," Jefferson said at his confirmation hearing in February 2022. "Further, long-run inclusive prosperity requires that the Federal Reserve pay careful attention to the safety and soundness of banks and the stability of the financial system."
In many ways, the vice chair role is meant to reinforce the message and agenda set by the chair. If confirmed, Jefferson would be working closely with Chair Jerome Powell at an enormously consequential time. The Fed pushed interest rates up for the 10th time in 14 months this week. But a mix of good and bad economic news -- and the looming prospect of a catastrophic U.S. government default -- have leaders at the central bank uncertain of their next move.
Inflation is still high, and the economy slowed more than expected at the beginning of the year. This spring's bank crisis has also spurred banks to pull back on lending, leaving many small businesses struggling to grow or plan for the future.