Leadership at the Federal Reserve has become its most diverse ever. There are more female, Black and gay officials contributing to the central bank’s interest-rate decisions than at any time in its 109-year history. .
, raises its benchmark short-term rate when it wants to lower inflation, and reduces it when it wants to accelerate hiring. Such moves, in turn, affect borrowing costs throughout the economy — for mortgages, auto loans and business loans, among others.
The change at the Fed has been a rapid one, with three African Americans and three women having joined the central bank’s 19-member interest-rate committee just this year. In addition, two of the presidents of the Fed’s 12 regional banks are now Black — Raphael Bostic of the Atlanta Fed and Susan Collins of the Boston Fed. Collins, formerly provost of the University of Michigan, became Boston Fed president this year. Bostic took office in 2017.
Richardson suggested that having more women in the Fed’s leadership is particularly important now, because many of the problems the central bank faces — including very low unemployment that is fueling wage increases and inflation — are related to women’s ability to join the workforce. Fewer women, particularly mothers of young children, are working now compared with pre-pandemic trends.That shortfall is driven, in part, by a drop in the number of childcare workers since the pandemic.
Vincent Reinhart, a former Fed economist who is now at Dreyfus and Mellon, said it’s unusual for the Fed to have experienced so much turnover so quickly. Fed governors serve staggered terms that are intended to result in one vacancy every two years. The regional bank presidents have five-year terms that can be renewed.The new members, including Barr, are more likely to favor lower rates to support the economy and hiring, Reinhart said.
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