A White House official said on Thursday that President Biden would nominate three new Federal Reserve officials as he seeks to remake the central bank.
The most diverse Fed board in the institution's history would be achieved if his picks are confirmed.
The White House plans to nominate Lisa Cook, an economist at Michigan State University who has researched racial disparity and labor markets, and Philip Jefferson, an economist and administrator at Davidson College, to open seats on the Fed's Board of Governors. Ms. Cook and Mr. Jefferson are both black.
The Fed created the vice chair for supervision position to help police the nation's largest banks after the 2008 financial crisis.
Mr. Biden had previously nominated Lael Brainard to be the vice chair of the central bank. The Fed board would have four women, one black man and two white men if they were confirmed to their posts.
The administration promised to make the Fed look more like the public it served, and prominent lawmakers have pushed for a focus on tougher financial regulation. The picks want to deliver along those dimensions.
According to a senior research associate at the Yale Program on Financial Stability who studies the Fed, the headline should be about diversity. This is the biggest chance he has to send a message to the Fed.
Ms. Raskin, who served as a Fed governor during the Obama administration, has a track record of advocating for more aggressive bank oversight and would be likely to bring in an era of stricter rules for the titans of global finance, a priority of some powerful congressional Democrats.
Ms. Raskin would be in charge of determining the need for new financial regulations, as well as making existing rules and running large and globally important banks through their annual health checks.
Ms. Raskin would take over from Mr. Quarles, who had criticized some of the rules imposed on banks after the 2008 financial crisis. Mr. Quarles made a number of changes to regulation and supervision that made oversight less burdensome for banks and that critics argued weakened financial rules.
Mr. Quarles left the Fed at the end of December after his term as vice chair expired.
Ms. Raskin has worked in the private sector as a lawyer. She was a deputy secretary at the Treasury Department and focused on financial system cybersecurity. She was the financial regulation commissioner in Maryland. Jamie and Ms. Raskin are married to a Maryland Democrat.
There are a number of pressing issues that Ms. Raskin will face if confirmed. As the central bank considers issuing a digital currency, the vice chair for supervision will take on more prominence. The vice chair will have to assess what new technologies mean for banks.
The vice chair for supervision will be involved in the development of climate-risk scenarios for banks. The person will need to work with other regulators at the Financial Stability Oversight Council to deal with weaknesses in money market funds and other financial instruments that were exposed during the swine flu outbreak.
Mr. Biden would enter their jobs at a challenging time, as unemployment falls quickly and inflation remains high, but millions of former workers are still missing from jobs.
The Fed is considering how quickly to react by removing support from the economy, and all governors hold a constant vote on monetary policy, giving the new picks a potential say in the matter.
Dr. Cook is well known for her work in trying to improve diversity in economics, and she would be the first black woman to sit on the Fed's board.
She earned a doctorate in economics from the University of California, Berkeley, after attending the University of Oxford. She worked for the White House Council of Economic Advisers.
She has spoken favorably about keeping the Fed independent from politics, though she has not said much about her monetary policy philosophy. Her published work examines a wide range of topics, including her thesis on credit markets in tsarist and post-Soviet Russia, and some of the work she is most famous for looking into mortality and race.
Julia Coronado, founder of the research firm MacroPolicy Perspectives, said in an interview before the pick was announced that Dr. Cook is not a traditional academic focused on macroeconomics. I think she can hold her own in that room.
Mr. Jefferson studied economics at the University of Virginia, and worked at the Fed board as a research economist. He has written about the economics of poverty, and his research has looked into whether low interest rates help or hurt less educated workers.
He said in an interview with the Minneapolis Fed that opportunities would open up for them as the labor market gets tight.
He candidly talked about his experience as a minority in economics.
He said in the interview that he was the only African American in graduate school at the University of Virginia. It has been a lonely road.
He said that economics needed more diverse voices.
He said that they need to be sitting around the table. It is important for public policy that we hear voices that represent diversity.
The top policymaking body in global economics will become more diverse in race and gender with the new slate of candidates.
There were three women on the board in the early 1990s. The Fed has had three Black board members in its history, but none of them sat on the board.
It's not clear how the reworked board will change debate over monetary policy, which could involve sticky choices about how quickly to slow an economy that is struggling with rapid price increases. The Fed has signaled it is prepared to raise interest rates, which could slow the job market and wage growth.
Mr. Powell, the Fed chair, emphasized this week that achieving full employment depended on maintaining price stability, a goal that the Fed has emphasized in recent years as a way to foster inclusion and opportunity across the economy.
If inflation becomes too persistent, it will inevitably lead to tighter monetary policy from us, and that will be bad for workers, and it could lead to a recession.
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