The Senate Banking Committee on Wednesday approved the nomination of Jerome Powell for a second four-year term as chairman of the Federal Reserve, just hours after the central bank began what will be a difficult effort to combat inflation.
Fed Governor Lael Brainard was also approved to serve as Fed vice chair, and the committee endorsed Philip Jefferson, an economist and dean of Davidson College in North Carolina. All three will now be considered by the full Senate. Lisa Cook, an economist for the state of Michigan, also advanced to the full Senate in a tied vote in committee.
If all nominees win Senate confirmation, the Fed will have six of its seven governorships filled as it grapples with the country’s worst bout of inflation since the early 1980s. On Wednesday, the Fed’s policymaking committee implemented its first interest rate hike since 2018 and said more rate hikes this year “will be appropriate.”
One seat remains vacant due to GOP opposition to Chairman Joe Biden’s nomination of Sarah Bloom Raskin for the Fed’s top financial regulation job. Republicans on the committee, led by Pennsylvania Sen. Pat Toomey, are they opposed Raskin’s commitment to include climate change concerns in Fed regulatory policies. Toomey argued that Raskin would use Fed rules to discourage bank lending to oil and gas companies.
Raskin withdrew her nomination Tuesday after West Virginia Democratic Sen. Joe Manchin said he would vote against her on the Senate floor. With the Senate split 50-50 and all Republicans opposed, Manchin’s opposition left Raskin with no path to confirmation.
Biden is expected to nominate another candidate to fill the vacant Fed board seat.
Powell passed in a 23-1 vote, with only Sen. Elizabeth Warren, D-Massachusetts, voting no. Warren has opposed Powell’s support for measures she says have weakened Fed oversight over big banks. She previously called Powell a “dangerous man” to run the Federal Reserve.
Sen. Sherrod Brown, an Ohio Democrat who chairs the committee, said Powell “has been a trusted voice and a steady hand during this crisis. He earned the opportunity to lead the Fed as chairman.”
Brainard, a Democrat who served as a top Treasury official in the Obama administration, passed 16-8. Jefferson passed unanimously. All Republicans voted against Cook, leading to a 12-12 vote. Cook drew opposition from some conservative economists who said his research on the impact of lynchings and racial violence on African-American innovation was not relevant. for the Fed’s mission.
A tied vote in committee allows the full Senate to consider a nomination.
If passed, Cook would be the first black woman on the Fed’s board in its 109-year history. Jefferson would be the fourth black man.
Cook has been a professor of economics and international relations at Michigan State since 2005. She was also a staff economist on the White House Council of Economic Advisers from 2011 to 2012 and was an adviser to the Biden transition team on banking and investment regulatory policy. the fed
Cook has also been an advocate for black women in economics, a profession that is notably less diverse than other social sciences. In 2019, she co-wrote a column in The New York Times stating that “economics is not a welcoming or supportive profession for women” and “is especially antagonistic to black women.”
To combat those issues, Cook has spent time mentoring younger black women in economics, running a summer program run by the American Economic Association, and won a mentorship award in 2019.
Jefferson, who grew up in a working-class family in Washington, DC, according to an interview with the American Economic Association, has focused his research on poverty and monetary policy. In a 2005 article, he concluded that the benefits of a buoyant economy in the form of reduced unemployment among lower-skilled workers outweigh the costs, including the risk of firms adopting automation once labor is scarce.