President Joe Biden has picked Federal Reserve Governor Philip Jefferson for a promotion to vice chair and will nominate economist Adriana Kugler to an open board slot, according to people familiar with the matter.
(Bloomberg) — President Joe Biden has picked Federal Reserve Governor Philip Jefferson for a promotion to vice chair and will nominate economist Adriana Kugler to an open board slot, according to people familiar with the matter.
The selections could be announced as soon as Friday, two of the people said, speaking on condition of anonymity to discuss private talks. A White House spokesperson declined to comment.
If confirmed by the Senate, Kugler — currently the US representative to the World Bank — would be the central bank’s first Latina policymaker in its 109-year history and would fill a governor vacancy left by the departure of Lael Brainard, who in February became the director of Biden’s National Economic Council.
Jefferson, who Biden appointed to the Fed last year, would take the vice chair slot previously held by Brainard. The position would also require Senate approval.
The dual nominations became the favored strategy in recent weeks as pressure mounted from Senator Robert Menendez, who long called for Biden to nominate a Latino person to the Fed, and other Democratic lawmakers. The administration had also considered naming a non-Latino to the vice chair position and leaving Jefferson as a governor.
A Menendez spokesperson reiterated on Wednesday night that the senator hopes the administration does officially nominate a Latino person to the Fed Board of Governors.
Right Notes
Kugler would add to a diverse roster of Biden appointees. Lisa Cook, whom he named to a governor position on the board last year, became the first Black woman in that position. Jefferson, who is the fourth Black male governor in the Fed’s history, would become the second Black vice chair, after Roger Ferguson.
Jefferson voted on Wednesday — as part of a unanimous Fed decision — to raise interest rates by a quarter percentage point and signal a potential pause.
Kugler, who is Colombian-American, is currently the World Bank Group’s executive director for the United States. She was appointed to the position in 2021 and was confirmed by the Senate last year.
Kugler has a doctorate in economics and served as chief economist at the Labor Department in President Barack Obama’s administration. Her research on labor markets, in particular, will likely be welcome by progressive lawmakers who have argued that the Fed’s aggressive actions to curb inflation may lead to widespread job losses.
Jefferson, who spent the bulk of his career in academia, was an economist at the Board of Governors in the 1990s. He was confirmed to the board by 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.
Senate Dynamics
The lopsided previous conformation vote raises the prospect of a relatively smooth confirmation to the vice chair post — though that was effectively a dual-track process where another candidate, Cook, drew heavy Republican opposition.
The picks are a concession to dynamics in the Senate and, chiefly, Menendez. The White House was initially said to have zeroed in on Northwestern University Professor Janice Eberly to replace Brainard, both as a governor and as vice chair, and said in February that an announcement was nearing.
The process stretched on for more than two months as Menendez stuck to his call for a Latino nominee. The White House explored whether naming a Latino candidate to another posting would win his support, and ultimately pivoted to the pending announcement: splitting the two roles vacated by Brainard, adding a new member and picking an existing one to serve as vice chair.
(Updates with Menendez spokesperson, in sixth paragraph.)
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