off-the-wire

UPDATE 1-White House considers two key nominations at the Fed -NYT

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds details on potential nominees, background on Fed) May 1 (Reuters) - U.S. President Joe Biden is likely to nominate current Federal Reserve Governor Philip Jefferson to be the central bank's vice chair and World Bank economist Adriana Kugler as a governor, the New York Times reported on Monday. Jefferson, a former economics professor who has been on the seven-seat Fed Board for just under a year, would be the U.S. central bank's second-ever Black vice chair. He would fill the spot vacated by Lael Brainard, who in February left to become one of Biden's chief economic advisors.


Kugler, a Colombian-American, would be the central bank's first-ever Latina governor and would fill the position left vacant by Jefferson.


The twin appointments could represent a political sweet spot for Biden who would need to get both appointments through a deeply divided Senate. Jefferson last year sailed through his Senate confirmation, drawing unanimous approval from a group that confirmed Brainard by a 52-43 vote and Jefferson's colleague Lisa Cook only with the tie-breaking vote of Vice President Kamala Harris.


The choice of Kugler could satisfy Senator Bob Menendez, who broke ranks with fellow Democrats in 2022 to vote against Biden's renomination of Jerome Powell as Fed chair because of what he said was the central bank's diversity problem.


He has been pushing the White House to name a Latino or Latina to the board, and for at least one of the Fed regional banks to name a Latino as Fed bank president for the first time. The report of Biden's impending nominations came on the eve of a Fed meeting this week where policymakers are expected to continue their fight against high inflation by increasing the benchmark short-term borrowing rate to 5.00% to 5.25%.


Jefferson has joined his fellow policymakers in every rate-hike decision since he took his post last May. White House press secretary Karine Jean-Pierre told reporters at the White House on Monday that Biden's pick for a Brainard's replacement would come in the "very near future." (Reporting by Mrinmay Dey in Bengaluru, Andrea Shalal and Jeff Mason in Washington; Editing by Franklin Paul and Josie Kao)

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