A decade ago, the Federal Reserve, the European Central Bank and the Bank of England were all led by people who had studied or taught monetary economics at MIT.

By the time the pandemic hit, none of the world’s three most powerful central bankers had a Ph.D. in this dismal science. After confirming that decision-making circles are no longer dominated by people of the same background, anyone should take a look at last week’s nominations for the vacant seat on the Fed’s board.

US President Joe Biden Three options are listed If approved by lawmakers, it would mark the first time women outnumbered men on the policy-making Federal Open Market Committee.

Davidson College professor Philip Jefferson poverty research, will be the only male who can make the cut.Lisa Cook, professor of economics at Michigan State University, published Research on Wealth, Gender and Racial Inequality, will be the first African-American female governor. Duke University professor Sarah Bloom Raskin — like Chair Jay Powell and Governor Michelle Bowman — is a A lawyer by training, if she is approved, has only slightly more economics PhDs in law than economics PhDs.

Investors should not abandon bets on the trajectory of U.S. interest rates. Ruskin, nominated as vice chair of oversight, will Strengthen rules and strengthen the Fed’s focus on a green financial system. But any shift in monetary policy would be more subtle.

“It’s not uncommon for people who are openly dovish to be appointed as central bankers. Usually, when they’re in that state, they feel huge institutional pressure to change,” said Peterson Institute think tank chairman and former UK interest rate Maker Adam Posen said. “This is the Thomas Beckett phenomenon – when people move from the state to the church, or from academia to the central bank, they change their behavior to better reflect the institution they now represent.”

Powell and Lael Brainard, who will soon be confirmed as vice chairman of monetary policy, has charted a clear path for 2022. “The chances of having a whole new board around the table by then are basically zero.” “

The nominee could help the central bank through its most difficult year in a long time. “The message will be very important to explain to those households whose incomes are squeezed that wage growth is not necessarily a good thing because possible inflation is difficult to do. These different contexts will help to do that,” Sahm said . “They’re going to make mistakes and we’re not going to like everything they do, but the FOMC is going to have a lot of really thoughtful, tech-savvy people.”

Barb for a lawmaker facing both sides of the aisle and has recently been drawn into scandal With deal activity involving some of its most senior officials, the nomination presents an opportunity to demonstrate the Fed’s ability to move with the times. Boy, they changed.

The triumvirate of Ben Bernanke, Mario Draghi and Mervyn King is the culmination of an era that began in the 1990s, when handing power to unelected technocrats to rein in inflation seemed like a reality. The most foolproof way to economic and financial stability. As it turns out, the three ended up spending most of their time battling the crisis. A near-short-sighted focus on consumer prices has fueled financial risk-taking, while the gap between the richest 1% and the rest has widened.

Monetary policy cannot solve all economic problems, regardless of the composition of the FOMC. But a more diverse group could mitigate some of the damage done by the hubris of previous generations by better understanding what matters to Main Street.

“The Federal Reserve is an independent institution and its decisions can disproportionately affect economically disadvantaged groups. Therefore, it needs to increase its legitimacy through broader representation,” Posen said. “The Powell Fed has made great strides to encourage public discussion and constructive work on broader labor market participation measures, but to be really credible, if you don’t have a committee of white men from relatively privileged backgrounds, it helpful.”

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