Who's in line for top Fed jobs

August 19, 2021 9:00 PM

WASHINGTON — The Biden administration has fast approaching decisions on how to fill top leadership positions at the Federal Reserve, from who takes a Fed board seat that has gone vacant for years, to whether Chair Jerome Powell gets reappointed.

There are seven seats on the Fed board, six of which are currently occupied. Among the current members of the board, all but one — Gov. Lael Brainard — were appointed by former President Donald Trump.

The White House has yet to make any personnel announcements for the central bank. The most immediate decision is who the administration will nominate to the open board seat. The Trump administration floated several names for the position — most recently Judy Shelton — none of whom were able to get approved by Congress.

Meanwhile, the term of Vice Chair of Supervision Randal Quarles will end in October, and President Biden is not expected to reappoint him. Another vice chair, Richard Clarida, has until January. Powell's term as chair ends in February. (Quarles can stay on the Fed board as a governor until 2032.)

Many expect Biden will either renominate Powell as Fed chair and name Brainard as one of the vice chairs, or nominate Brainard to head the central bank while choosing outsiders for the vice chair roles.

There is also always the chance that Biden could name outsiders to all of the top positions. There is no shortage of possible contenders, including officials who formerly served on the Fed board during past administrations.

Biden is facing particular pressure from some corners of Washington to appoint a person of color to the Fed. In the history of the central bank, only three Fed governors have been Black and none of them were women.

Here are candidates to take on key leadership roles as Biden seeks to reshape the Fed or maintain the status quo:

Current Fed insiders

Powell and Brainard are the two main contenders to get the nod as Fed chair once Powell’s term ends in February. Many expect Biden to renominate him to the position, but his record on bank regulation has some progressives pushing Biden to consider a new head of the central bank.

Brainard would be his probable successor, given both her experience on the Fed and alignment with the Biden administration’s agenda. While at the Fed, Brainard has given detailed speeches on the risk that climate change poses to the financial system and has spearheaded the Fed’s efforts to revamp the Community Reinvestment Act. She was also mentioned as a candidate for Treasury secretary before Biden nominated Janet Yellen to the role.

In the event that Biden renominates Powell, Brainard would likely be a favorite to take over as either vice chair or vice chair of supervision. The latter would give her a key role in making regulatory policy for the largest banks.

William Spriggs

William Spriggs, chief economist at the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and an economics professor at Howard University, is one of the candidates most frequently mentioned as a top contender for a seat on the Fed.

Spriggs served in the Obama administration as the assistant secretary in the Office of Policy at the Labor Department, and has become a leading voice for the modern labor movement, particularly the employment gaps between white and Black Americans.

In a July op-ed for The New York Times, Spriggs applauded the Fed’s new average inflation targeting framework, which seeks to make up for years of persistently low inflation by keeping interest rates low for a longer period of time, arguing that the new guidance will help in particular people of color looking for employment.

“Ignoring the Black unemployment rate isn’t just a moral issue; it ignores potential growth for the economy,” he said.

Bloomberg reported in February that both Spriggs and Lisa Cook had the backing of several key White House officials and allies to become Fed governors. Spriggs also has support from progressives for the vice chair role and even Fed chair, although he has said he hopes Biden renominates Powell. However, Spriggs told The Washington Post in June that he would accept a nomination to the Fed if it were offered to him.

Lisa Cook

Michigan State University professor Lisa Cook has also been floated as one of Biden’s top choices for the Fed. Like Spriggs, she also reportedly has the support of White House officials. She would be the first Black woman to serve on the Fed board.

Cook is known for her research on how racial and gender disparities affect economic growth. She also authored a piece last year on distributing stimulus checks to low-wage workers, in which she focused on how to get money as quickly as possible to the unbanked and underbanked populations.

Cook is Senate Banking Committee Chair Sherrod Brown’s top pick for the Fed, CNBC reported in May. The Democratic senator from Ohio is said to favor Cook for the vacant seat given her “expertise, research and lived experience as a woman of color.” Cook is also frequently mentioned as a candidate for the vice chair role and even Fed chair, JPMorgan chief economist Michael Feroli wrote in a research note.

Treasury Secretary Janet Yellen mentored Cook in the 1990s while Cook attended graduate school at the University of California, Berkeley. Later, Cook served as a senior economist for the Council of Economic Advisors during the Obama administration. She is currently a member of the steering committee at the Center for Equitable Growth.

Sarah Bloom Raskin

Sarah Bloom Raskin, former deputy secretary of Treasury under Obama and a Fed governor from 2010 to 2014, has been floated as a candidate for a number of financial regulatory positions, including for a seat on the Fed.

Raskin — who is married to Rep. Jamie Raskin, D-Md. — was Maryland’s commissioner of financial regulation during the throes of the financial crisis from 2007 to 2010 and is currently a professor at Duke University’s law school. She has become a popular figure among Democrats, especially those who lean left, for her outspoken stances on climate change.

In addition to being a potential contender for the Fed, Raskin is also under consideration to lead the Office of the Comptroller of the Currency, although The Wall Street Journal reported in May that Raskin turned down an offer to run that agency.

Many have theorized that if Biden were to name Brainard as the chair of the central bank, Raskin could be the choice for vice chair for supervision.

Even if Biden chooses to renominate Powell as Fed chair, Raskin could be viewed by some on the left as a more favorable option for vice chair for supervision than Brainard, who was panned by some progressives when she was reportedly considered for the Treasury secretary job.

Raphael Bostic

Federal Reserve Bank of Atlanta President and CEO Raphael Bostic is not only in the running for the Fed’s vacant seat, but is also a potential candidate for Fed chair.

Bostic has even addressed the speculation previously, telling Axios in May that if appointed Fed chair, he’d do things “differently.”

"I'm going to be personal. I'm going to be engaging,” he said. “I'm going to solicit input and really try to not be the chair, who sits up here, and then all the staff is at a different level."

Bostic is also said to be under consideration to lead the OCC. An economist and academic who taught at the University of Southern California before leading a regional Fed bank, Bostic was a senior policy advisor in the Department of Housing and Urban Development and before that a senior economist at the Federal Reserve Board.

After the police killing of George Floyd, Bostic has been outspoken about how racism and racial inequality negatively affect economic growth and access to capital. He has urged the Federal Reserve System to promote “maximum employment” to help address inequality. The Atlanta Fed and several other of the regional banks have held a series of events over the past year to discuss, among other issues, how discrimination and racial bias persist in the job market, housing system and the economics field.

Roger Ferguson

Former Fed Vice Chair Roger Ferguson has also been mentioned as someone who could return to the central bank under Biden. Ferguson served as vice chair from 1999 to 2006, during which he helped lead the central bank’s immediate response to the 9/11 terrorist attacks.

Ferguson was most recently president and CEO of TIAA — a $1 trillion-asset manager specializing in financial services for academics and nonprofit industries — but retired from the post in March.

Former Fed Chair Alan Greenspan once called Ferguson “one of the most effective vice chairmen in the history of the Fed.” He was reportedly considered for Fed chair in 2013 before then-President Barack Obama chose Janet Yellen. Ferguson’s name was also mentioned as a candidate for Treasury secretary under Biden.

“If Biden wants to go with an outsider [for Fed chair], we believe Roger Ferguson would be a likely pick,” Jaret Seiberg, an analyst with Cowen Washington Research Group, said in a July research note. “We believe he would be a strong pick as he combines monetary policy background with financial sector experience. He also likely would have the strong backing of the Congressional Black Caucus, which would make it difficult for progressives to attack him.”

Seth Carpenter

Seth Carpenter, the new global chief economist at Morgan Stanley and former chief U.S. economist for UBS, is also under consideration for a job at the Fed, according to The Wall Street Journal.

Carpenter served in the Obama administration as the acting assistant secretary for financial markets at the Treasury Department, and was the former president’s nominee to serve in the role on a full-time basis, although the Senate never voted on his nomination. Before joining Treasury, Carpenter spent 15 years at the Fed as research economist.

Carpenter could be a candidate for the vice chair role at the Fed, a job currently held by Richard Clarida.