Biden’s Candidates for Fed Supervision Post Include Bostic, Bloom Raskin, Corday
(Bloomberg) -- President Joe Biden is considering Federal Reserve Bank of Atlanta President Raphael Bostic and Duke University law professor Sarah Bloom Raskin to be the Fed’s top banking regulator, along with former Consumer Financial Protection Bureau director Richard Cordray and others, according to people familiar with the matter.
The White House is presently conducting interviews for positions on the Fed’s Board of Governors, the people said. Biden has said he’ll soon announce nominees for three seats on the Fed board, including vice chair for supervision.
Other candidates for board slots include Valerie Wilson, director of the left-leaning Economic Policy Institute’s Program on Race, Ethnicity, and the Economy; Lisa Cook, a professor of economics and international relations at Michigan State University; William Spriggs, chief economist at the AFL-CIO and Karen Dynan, a former top Treasury official under President Barack Obama and an economics professor at Harvard University.
The people familiar with the matter asked not to be identified because Biden’s deliberations are private.
Biden “is looking for people of independent judgment who are going to be excellent at the craft but also that are going to face squarely and head on the economic challenges that we face,” White House National Economic Council Director Brian Deese said in an interview Wednesday on Bloomberg Television’s “The Close.” Deese also said, “We anticipate we will be moving this process in the coming days and weeks.”
Democratic Senator Elizabeth Warren and several progressive groups have expressed keen interest in Biden’s pick for vice chair for supervision -- regarding the choice as key to pushing the central bank to more aggressively regulate financial institutions.
The supervision vice chair is Washington’s most powerful banking overseer, inspecting and setting rules for the nation’s largest banks like Citigroup Inc. and JPMorgan Chase & Co. The Fed supervises annual stress tests that verify the health of the big lenders and would the individual filling the role would be expected to play a leading role working with the Biden administration on financial regulatory policies, including with regard to cryptocurrencies.
Warren has told associates that she would support Bloom Raskin or Cordray for the position, according to two people familiar with the Fed search.
Warren declined to comment about Cordray being in the mix earlier this week, and has previously declined to do so on other potential Fed picks -- beyond her opposition to Chair Jerome Powell getting a second term at the helm.
Bostic didn’t immediately respond to a request for comment on Wednesday. In an interview Nov. 22 with Bloomberg Television, he didn’t directly respond to a question on whether he would be interested in the job, while suggesting he had not been interviewed.
“It is still true I don’t have any trips to Washington on my calendar,” he said last week. “We’ll have to see in terms of if anything comes up and what the actual parameters are and then I will make a decision at that point. All of that stuff is out of my hands.”
Cordray had no immediate comment. Bloom Raskin, Wilson, Cook, Spriggs and Dynan did not immediately respond to requests for comment.
Biden has said he’ll nominate Powell for a second term and Governor Lael Brainard to serve as vice chair. With three more seats to fill, Biden has an opportunity to reshape the seven-member board with a majority of Democratic appointees.
The personnel decisions are consequential as the Fed faces challenges on both sides of its mandate to keep inflation down and maximize employment. Inflation is running at the highest rate in three decades, and the labor market, while strong, still isn’t fully healed from the steep declines of 2020.
Biden’s Fed picks will have to balance the risk of high inflation against the Fed’s pledge to hold rates at zero until the nation reaches maximum employment, which the central bank has defined as a broad-based and inclusive goal.
Some segments of the population still lag behind in the job market. Black unemployment in October stood at 7.9% compared with a low of 5.2% in 2019. The national unemployment rate stood at 4.6% in October.
Powell said over two days of congressional hearings this week that the Fed will consider speeding up its tapering of asset purchases amid risks from elevated inflation. Policy makers are currently on track to wrap the process up by mid-2022. Ending sooner would give officials the option of raising interest rates earlier, if they decide that’s needed.
©2021 Bloomberg L.P.