WASHINGTON, D.C. Feb 16, 2023 (Biz Republic) — U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Committee on Banking, Housing, and Urban Affairs, today joined MSNBC’s José Díaz-Balart Reports live where he called on President Joe Biden to seize this historic moment to nominate a highly-qualified Latino American to the Federal Reserve’s Board of Governors. The Senator pointed out the fact that in the Fed’s 109-year history there has never been a Latino American who has served on the Board of Governors, despite being the fasted-growing demographic group with a $2.8 trillion economic output.
“Well, in the 109 plus year history of the Federal Reserve, we have never had a Hispanic on the Federal Reserve. And why is it important? Because this is the largest minority in the country. [$2.8] trillion domestic marketplace impact. Younger by a decade than the overall population. Having the knowledge of the impact of the Federal Reserve, whether it is rate hikes, monetary policy or their dual obligation for full employment, having that voice be there is incredibly important. We have other voices there, but we have not had our voice. As a growing part of the marketplace and as a growing part of the American population, I think it is essential. There is no reason why the Administration cannot put forward somebody who is qualified. I know several people who have, you know, the economist background, who have the financial service backgrounds, the requisite backgrounds. We are sending some of those names to the White House. I am sure they could deduce others. They have to have the will to ultimately nominate somebody of Hispanic descent to the Federal Reserve who is qualified to help us lead on monetary policy and employment policy,” said Senator Menendez.
Sen. Menendez has been a champion in the fight to address diversity issues in the financial services industry and amongst financial regulators and, in particular, at the Federal Reserve. Last December, the Senator led a bicameral effort urging the Federal Reserve Bank of Kansas City to appoint a Latino President. When the Federal Reserve Board of Governors failed to appoint a Latino as President of the Chicago Fed, the Senator criticized the Board of Governors for yet again forgoing an opportunity to give the Latino community a voice in an institution that makes far-reaching decisions about the economy.
Sen. Menendez has led multiple efforts on this subject, including when the Fed was in the process of appointing a new president for the Boston and Dallas Federal Reserve Banks, and has asked about it at multiple committee hearings with Federal Reserve Chair Jerome Powell and Fed Vice Chair for Supervision Michael Barr. In addition, the Senator has suggested reforms to improve the transparency of the Federal Reserve Bank President and director selection processes.
With a high-profile opening at the Federal Reserve, key Senate Democrats are lining up behind a long-running effort by Sen. Bob Menendez (D-N.J.) – making the U.S. central bank more diverse by selecting its first Hispanic governor.
The Wall Street Journal reported on Wednesday that the White House was considering Austan Goolsbee, president of the Chicago Fed, to be the Federal Reserve’s next vice chair. Goolsbee would replace Lael Brainard, who will take over as director of the National Economic Council later this month. Several potential new Fed nominees were floated, and the business pubs suggested several more. Most of these potential picks are eminently qualified, but they’re also white, which is the issue.
No nomination has been made yet, and Biden’s White House has previously floated nominees for regulatory positions before changing course weeks or months later. Multiple Democrats on the Senate Banking Committee told Wednesday night that they want to see the White House prioritize diversity with its pick to replace Brainard, including the panel’s chair, Sen. Sherrod Brown (D-Ohio).
“I’ve worked for a very diverse Fed,” Brown told. Brown pointed to two successful nominations that cleared the Senate last year – Fed Govs. Lisa Cook and Philip Jefferson – and said both Black economists exemplified a “diversity of thought” by prioritizing the Fed’s dual mandates of price stability and maximum employment. “I’ve spoken to the White House about all those things – diversity of thought, diversity of candidates,” Brown said, adding: “There’s never been a Latino on the Fed board.”
There’s early evidence this push by Menendez will attract support from more than just the Banking Committee’s progressives. Sen. Mark Warner (D-Va.) told us he had enjoyed working with Goolsbee in the past and said he’s a “smart economist.” But Warner also noted that “Sen. Menendez has a very good point – that we don’t have a single Latino member on the Fed.”
The White House faces similar pressure on replacing Labor Secretary Marty Walsh when he leaves that post as expected. AAPI lawmakers want to see an Asian American pol tapped for that Cabinet position, while other Democrats have been pushing their own potential candidates.
The lack of Hispanic representation inside the Fed is a topic that Menendez has been hammering for years now. Last night, we asked whether the New Jersey Democrat’s preference for a Hispanic Fed governor would be enough to vote against Goolsbee if the White House nominated him. Menendez replied: “I’ve been making it very clear to the administration. They need to give me someone to vote for, and that somebody should be Hispanic.”
Sen. Ben Ray Luján (D-N.M) told us he would “absolutely” stand behind Menendez’s push for a Hispanic Fed governor: “When we look at the buying power, market power, where pensions sit, decisions that are made every day – I do not understand why qualified Hispanics who have been doing this work, who have the experience, have not been considered or have not been elevated.”
Senate Republicans on the Banking Committee are ambivalent on this particular point. Sen. John Kennedy (R-La.) said his chief concern was having officials inside the Fed who were focused on quashing inflation. “I don’t care what gender they are. I don’t care what color they are. I don’t care what their politics is,” Kennedy said. “I want them to be able to explain to me how they’re going to get us back to lower inflation, preferably 2%, without putting everyone in America out of work and crashing the economy.”
Sen. Thom Tillis (R-N.C.) said he was “sympathetic” to Menendez’s push, adding that he wanted to see “someone with a track record that’s going to still keep the Fed a consensus organization.” “I would hope that the White House would recognize they’ve got the dual challenge of finding someone that I would support,” Tillis said, “and that the concerns of Menendez and others are addressed too. Otherwise, it could be tough sledding.”