The Senate Banking Committee has given its approval to President Joe Biden’s nominations for the Federal Reserve Board of Governors. This paves the way for a vote in the full Senate later this year.
One of the approved nominees is Philip Jefferson, who is nominated for the position of vice chair of the Federal Reserve. If confirmed by the Senate, Jefferson will replace Lael Brainard, who left her role at the Fed to lead Biden’s National Economic Council earlier this year.
Another nominee, Lisa Cook, has been approved by a 13-10 vote. Cook, who joined the board in 2022, is nominated for a full, 14-year term on the Federal Reserve Board. She previously filled an unexpired term after a narrow confirmation by the full Senate.
The third nominee to be advanced by the committee is Adriana Kugler, who Biden chose to join the Federal Reserve Board of Governors. Kugler, currently the U.S. representative to the World Bank, was also approved by a 13-10 vote. All Democrats and South Dakota Republican Sen. Mike Rounds voted in favor of her nomination.
If confirmed by the full Senate, Kugler, Jefferson, and Cook will bring much-needed diversity to the American interest-rate setting board. Kugler would become the first Hispanic American on the Fed’s Board of Governors, while Cook would be the first Black woman to be 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.
These committee votes come at a crucial time for the central bank, as its governors grapple with decisions regarding interest rates. The current series of rate hikes is aimed at combating high inflation, but their impact takes time to manifest in the broader economy. In June, inflation rose by 0.2% and saw a 3% increase year over year, with price hikes beginning to slow down.
Last month, the Federal Reserve paused a series of 10 consecutive rate hikes that started in March 2022 and raised the benchmark federal funds rate by 5 percentage points. Recent data shows that soaring interest rates have a significant impact on Americans making decisions about buying or selling a home and taking out car loans.
As of Wednesday, the average rate for a 30-year fixed mortgage was 6.96%, according to Mortgage News Daily. This is 4 percentage points higher on average than it was on July 12, 2021, when it reached near-historic lows.
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