Jan 13, 2022 - Economy

Biden names Sarah Bloom Raskin as Fed's top banking regulator

Sarah Bloom Raskin, governor of the U.S. Federal Reserve, speaks during an open meeting of the Board of Governors of the Federal Reserve in Washington

Sarah Bloom Raskin during a Fed meeting in 2013. Photo: Andrew Harrer/Bloomberg via Getty Images

President Biden will nominate Sarah Bloom Raskin as the Federal Reserve's top Wall Street cop, a Biden administration official said, one of three nominees being unveiled for the critical open seats on the central bank's board of governors.

Why it matters: It's Biden's biggest mark yet on the influential economic body that's center stage as the country grapples with inflation rising at the fastest pace in decades and a recovering labor market.

  • Biden also tapped Lisa Cook, an economist who teaches at Michigan State University and previously served on the Council of Economic Advisers during the Obama administration, and Davidson College's Philip Jefferson, a former Fed economist.
  • If confirmed, Cook would be the first Black woman to serve on the Fed's seven-member board, while Jefferson would be the fourth Black man.

Between the lines: Raskin, Biden's pick for the Fed's vice chair of supervision, is likely to appease Democrats who want someone in the role who's tougher on financial regulation and vocal on issues like climate change.

  • Raskin, a Duke University law professor who served as a Fed governor from 2010 to 2014 before joining the Treasury Department during the Obama administration, has been outspoken about regulators calling out the risks climate change poses to the financial system.
  • If confirmed, Raskin could influence how banks and other financial institutions weigh and disclose their climate risks. Republican Senators signaled this week they will be skeptical of her climate views and may oppose her nomination entirely.

The bottom line: Biden's picks for the Fed board come at a crucial time for the central bank that's moving to tame inflation that's been more persistent than initially thought.

  • With the new additions may come more focus on issues the Fed has recently started to be more outspoken about, Fed watchers say — including climate change and a more inclusive definition of full employment that factors in indicators like the Black unemployment rate.

What's next: Fed Chair Jerome Powell, tapped for a second term by Biden in November, and Lael Brainard, Biden's pick for vice-chair, both faced confirmation hearings this week and are on track for Senate votes.

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