President

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Biden’s latest picks for the Federal Reserve would further transform the diversity of US central bank leadership in just two years.

Biden said Friday that he will nominate economist Adriana Kugler, a Colombian

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American economist who is the U.S. Representative to the World Bank, becoming the first Latina to serve on the Feds Board of Governors in its 109-year history.

Philip Jefferson, who was sworn in as governor last May, will become the second black person to serve as his vice chairman.

Biden also announced his intention to nominate Lisa Cook, 58, who last year became the first black woman to join the Fed’s board, for a full 14-year term. Her current term expires in January.

The nominations, which require Senate confirmation, come amid mounting pressure

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from Senator Robert Menendez of New Jersey, who has long called for Biden to nominate a Latino to the Fed and other Democratic lawmakers. The administration had considered appointing a non-Latino as vice president and leaving Jefferson as governor, according to people familiar with the discussions.

These nominees understand that this is not a partisan job, but plays a vital role in pursuing maximum employment, maintaining price stability and overseeing many of our nation’s financial institutions, Biden said in a statement Friday. I am confident that these nominees will help build on the historically strong economic recovery we have had under my administration.

The nominations were made at a time of economic anxiety, with the country potentially defaulting if Congress fails to raise the debt ceiling, the financial sector is shaken by bank failures, and the Fed itself attempts to quench inflation without triggering a recession. cause.

Kugler, 53, was tapped to fill a vacancy created when then-Vice Chairman Lael Brainard left in February to head Biden’s National Economic Council. Kugler was confirmed as a U.S. representative to the World Bank by ballot last year. If confirmed to the Fed post, Kugler would serve a term that expires in January 2026.

She earned a doctorate in economics from UC Berkeley and served as chief economist in the Labor Department in President

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Obama’s administration. Her research into labor markets in particular is likely to be applauded by progressive lawmakers who have argued that the Fed’s aggressive actions to curb inflation could lead to widespread job losses.

She understands what the Fed is about both the bad effects of inflation, but also how slowing the economy can affect different groups differently, said Alfonso Flores-Lagunes, president of the American Society of Hispanic Economists and professor of economics at Syracuse University. .

Flores-Lagunes said the nomination was fundamental and called the lack of Latino representation at the Fed a glaring aspect of inequality in the US.

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Jefferson, 61, who spent most of his career in academia, was an economist with the Feds Board of Governors in the 1990s. Prior to earning his doctorate in economics from the University of Virginia, he participated in the pipeline program of the American Economic Assn. for minority students.

He was confirmed to the board of directors in a 91-to-7 vote in the Senate last year, with Republicans praising his commitment to the Fed’s narrow mandates and Democrats applauding his research on poverty and diversity.

The lopsided previous confirmation vote raises the prospect of a relatively smooth path to the vice chairman position, though that was effectively a two-track process that saw another candidate, Cook, face stiff Republican opposition.

The move is a concession to the dynamics in the Senate and especially in Menendez.

I have fought to ensure that institutions like the Federal Reserve better reflect America, with the goal of enacting policies to encourage broad economic growth for all communities, Menendez said in a statement Friday. President Biden indicates that the hopes and dreams of black and Latino Americans are central to America’s promise.

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With a narrow majority in the Senate, the Democrats have 51 seats ahead of the Republicans (49). Biden could not afford to nominate candidates who would not receive support from his own party, as a non-Hispanic candidate may have done. Menendez voted against reappointing Jerome Powell last year, criticizing the Fed chairman for failing to elevate Latinos to central bank leadership positions.

It was initially said that the White House had brought in Professor Janice Eberly of Northwestern University to replace Brainard, both as governor and vice president.

But Menendez pushed for a Latino candidate, echoing calls made during previous vacancies on the Fed board and reserve banks, arguing that the country’s monetary policy stance should be representative of the total population, whose 19% are Latino.

Kugler will bring labor market expertise to the central bank at a crucial time.

After a year of rapid rate hikes to cool inflation, Fed officials earlier this month signaled a willingness to pause and assess the impact of tighter monetary policy on segments of the economy, including the labor market.

Kugler’s previous research on workforce issues such as youth employment and unemployment insurance

including during a stint as chief economist of the Labor Department in President Barack Obama’s administration,

could be especially helpful as the Fed navigates this new policy phase.

A key question is whether Kugler will take a more skeptical view of the need to raise rates further to curb stubborn inflation, especially if the labor market begins to weaken significantly.

Brainard was one of the Fed’s most moderate members, and progressive Democrats have called on the White House to nominate a candidate who would take a similar stance and serve to counter what they see as Powell’s unique focus on taming prices.

Born in the US to Colombian parents, Kugler spent part of her upbringing in Bogota and has also published extensively on international development.

She comes from a family of economists. Her father was an economist who worked with the World Bank on development projects throughout South and Central America, and her brother, Maurice Kugler, is a professor of public policy at George Mason University.

Kugler’s grandparents fled Europe in 1939, leaving behind relatives who died in concentration camps during the Holocaust, she said at her 2021 Senate hearing.

Wingrove and Saraiva write for Bloomberg. Dave Merrill and Ana Monteiro of Bloomberg contributed to this article.