Politics

Biden’s Federal Reserve Board nominees clear key Senate committee

Fed Governor Philip Jefferson testifies before a Senate Banking Committee hearing on his nomination to be the Federal Reserve’s next vice chair, on Capitol Hill in Washington, D.C., June 21, 2023.

Jonathan Ernst | Reuters

WASHINGTON — The Senate Banking Committee approved President Joe Biden’s three nominees to the Federal Reserve Board of Governors on Wednesday, teeing up a vote in the full Senate later this year.

The committee unanimously approved Philip Jefferson as Biden’s nominee for vice chair of the Federal Reserve. If the full Senate confirms him, Jefferson will replace Lael Brainard, who left her position at the Fed to lead Biden’s National Economic Council earlier this year.

Lisa Cook, who Biden has nominated for a full, 14-year term on the Federal Reserve Board, was approved 13-10 by the panel. Cook first joined the board in 2022, when the full Senate narrowly confirmed her to fill an unexpired term.

The third nominee the committee advanced was Adriana Kugler, whom Biden tapped in May to join the Federal Reserve Board of Governors for the first time. Kugler was also approved 13-10, with all Democrats and South Dakota Republican Sen. Mike Rounds voting in favor. Kugler is currently the U.S. representative to the World Bank and executive director of the World Bank Group for the U.S.

If the full Senate approves the three nominees, Kugler, Jefferson and Cook’s Fed confirmations will all mark milestones in racial and ethnic diversity on America’s interest-rate setting board.

Kugler would become the first Hispanic American on the Fed’s Board of Governors, and Cook would become the first Black woman confirmed for a full term. Jefferson would be only the second Black person to hold the vice chair position in the history of the Fed board.

The Senate committee votes came at a delicate moment for the central bank, as its governors grapple with when, and how high, to raise interest rates again this year.

The current string of hikes aims to counteract high inflation, but Fed moves take time to soak into the broader economy. Inflation rose 0.2% in June and 3% year over year, as price increases started to slow.

Last month, the Federal Reserve paused a series of 10 consecutive rate hikes that began in March 2022, which have added 5 percentage points to the benchmark federal funds rate.

Recent data shows soaring interest rates are a major factor in millions of Americans’ decisions about whether to buy or sell a home, or take out a car loan. 

On Wednesday, the average rate for a popular 30-year fixed mortgage was 6.96%, according to Mortgage News Daily. That’s 4 percentage points higher, on average, than it was on July 12, 2021, when it dropped to near historic lows.

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