Fed Governor Philip Jefferson named as new vice chair to succeed Lael Brainard

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Dr. Philip Nathan Jefferson, of North Carolina, nominated to be a Member of the Board of Governors of the Federal Reserve System, speaks during a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., February 3, 2022.

Ken Cedeno | Reuters

Federal Reserve Governor Philip Jefferson will be nominated by President Joe Biden to be vice chairman of the central bank’s board, the White House announced Friday.

Though one of the newest members of the Board of Governors, Jefferson would take over a key policymaking position at a time when the Fed is trying to tamp down inflation without causing a harmful recession.

Biden also said he will nominate Adriana Kugler for a vacant governor’s seat and Lisa Cook for another term as governor. Kugler is currently the U.S. representative to the World Bank and would be the first Latina on the board, while Cook has been on the board since May 2022.

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

The moves, which will need Senate confirmation, come as the Fed also is navigating its way through a banking crisis that has seen multiple regional institutions shuttered over the past two months.

The Senate confirmed Jefferson to the board in May 2022, four months after he was nominated by Biden.

Since taking his seat, Jefferson has been relatively quiet on the policy front. In recent remarks, he argued against raising the Fed’s 2% inflation target and said he wasn’t especially worried about the pace at which the economy is slowing. He has voted for each of the interest rate increases approved since he took his seat.

As vice chair, he takes a position last occupied by Lael Brainard, who is now Biden’s director of the National Economic Council. Known as one of the more progressive members of the board, Brainard argued against loosening regulations for regional banks and had been an advocate for the study of whether the Fed should adopt a central bank digital currency.

Before coming to the Fed, Jefferson was a professor of economics as well as vice president for academic affairs and dean of faculty at Davidson College. He also has worked as a professor at Columbia University and Swarthmore College as well as a research economist for the Fed.

The nomination was not unexpected; multiple media outlets had reported that Jefferson was Biden’s likely choice as vice chair.

If confirmed, Jefferson would be the second Black person to hold the vice chair position. Cook is the first Black woman to serve on the board.

Senate Banking Committee Chairman Sherrod Brown applauded the nominations.

The nominees “reflect the vibrant diversity of our country, and the people who make it work,” Brown said in a statement.

— With reporting by CNBC’s Kayla Tausche.

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