The U.S. Senate confirmed Philip Jefferson as vice chairman of the Federal Reserve Board of Governors on Wednesday in a bipartisan vote. Jefferson, 61, had been serving on the Board of Governors since May 2022 and has received broad bipartisan support during his confirmation process. His nomination was approved by an 88-10 vote, with only Republicans opposed. He will now serve in the No. 2 role in the central bank alongside Fed Chairman Jerome Powell.
Jefferson's primary responsibility will be to ensure that monetary policy and Fed decisions align with the central bank's dual mandate of promoting maximum employment and price stability. This is especially crucial as inflation continues to impact the economy and undercut families' purchasing power.
Before his appointment as a Fed governor, Jefferson was an economics professor and college dean. Since joining the Federal Reserve, he has voted for every interest rate hike as the central bank raised its benchmark overnight interest rate from near-zero in March 2022 to the current 5.25%-5.50% range.
With interest rates now seen as high enough to slow the economy and cool the job market, Fed policymakers are expected to leave the policy rate unchanged at their Sept. 19-20 meeting. However, they will likely keep the option open for one last rate hike before year's end, allowing them time to assess if they have done enough to combat inflation that was running at 40-year highs just last year.
Later on Wednesday, the Senate was scheduled to vote on two other Federal Reserve nominees put forward by President Joe Biden - Lisa Cook and Adriana Kugler, both proposed to serve terms on the Board of Governors. Their nominations have proven more controversial and politically divisive than Jefferson's. Both were approved by the Banking Committee in 13-10 votes, with all Republicans except Sen. Mike Rounds (R-SD) voting against them.
Cook has already served on the Board of Governors for over a year but faced questions from GOP lawmakers about perceived partisanship and lack of experience working with monetary policy during her previous confirmation process. Kugler is currently serving as executive director of the World Bank, a position she has held since May 2022.
Despite these controversies, Sen. Sherrod Brown (D-OH), chairman of the committee, has praised all three nominees for their service during times of economic uncertainty and believes their judgement will add a unique perspective to the Board as they work towards making bank systems resilient against future failures.
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