Lisa Cook becomes first black woman to serve on Fed board

The US Senate has confirmed Lisa Cook to serve on the Federal Reserve’s board of governors, making her the first black woman to hold the position in the central bank’s 109-year history.

All 50 Democrats in the upper chamber of Congress voted in favour of Cook, a professor of economics at Michigan State University. Vice-president Kamala Harris cast the tiebreaking vote after Republicans voted unanimously against her appointment.

Cook, who formerly worked as a staff economist on the White House Council of Economic Advisers during the administration of former president Barack Obama, will serve a two-year term expiring January 2024.

“She will bring an invaluable perspective while implementing the Federal Reserve’s dual mandate and protecting its independence,” said Sherrod Brown, Democratic chair of the powerful Senate banking committee that oversaw the nomination process.

“Dr Cook understands how economic policy affects all Americans,” Brown added. “She knows that workers drive our economic growth, and she understands that when everyone participates in our economy, it grows faster and stronger.”

Despite the historic nature of her appointment, Cook encountered multiple setbacks on the path to confirmation. Democrats had to push back the final vote late last month after Covid-19 absences left her without enough support to proceed.

Republicans have opposed her nomination, accusing her of lacking relevant economic experience to fulfil the responsibilities of the role.

Pat Toomey, the highest-ranking Republican senator on the banking committee, resurrected those complaints on Tuesday, calling Cook “unqualified” to help the Fed to combat high inflation.

Cook, who speaks six languages, has focused her research on the economic costs of discrimination. Her studies have ranged from how racially motivated violence stymies innovation to output lost because of inequality.

Cook was nominated alongside Philip Jefferson, the dean of faculty at Davidson College who is expected to be confirmed with bipartisan support. Sarah Bloom Raskin, the Biden’s administration’s initial pick for vice-chair for supervision, was forced to withdraw from consideration after her views on climate-related financial risks lost her support.

The president has since tapped Michael Barr, a former Treasury official, to fill the position.

Beyond Jefferson and Barr, the Senate must also confirm Jay Powell for a second term as Fed chair. Lael Brainard was confirmed late last month to serve as vice-chair.

Cook will join a central bank confronting the biggest inflation challenge in decades. The Fed has already resorted to measures not used in years — including half-point rate rises, which it implemented last week. At least two more are expected this year, with the Fed shifting back to quarter-point adjustments in the fall.

The rate increases are part of the Fed’s plans to shift monetary policy “expeditiously” to a “neutral” setting that no longer stimulates the economy. It will also begin shrinking its $9tn balance sheet next month.

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