Biden’s plan to reshape the Fed just hit a hurdle

By Anneken Tappe, CNN Business

President Joe Biden planned to reshape the Federal Reserve through his nominations for the three vacant seats on the board of governors. But Democratic Sen. Joe Manchin of West Virginia threw a wrench into those plans Monday.

The crux of the matter is the nomination of Sarah Bloom Raskin, a former deputy Treasury secretary and a governor of the Federal Reserve Board during the Obama administration, who is facing opposition in a divided Senate.

Raskin’s stance on environmental issues, including her view on the transition away from fossil fuels, are colliding with soaring gas prices and a renewed debate about oil independence in the face of the Russia-Ukraine conflict.

“Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs,” Manchin said in a statement on Monday announcing his opposition to Raskin’s nomination. Manchin is not a member of the Senate Banking Committee that will be voting on Raskin’s candidacy.

The US Chamber of Commerce already voiced concern over her nomination to be the vice chair of supervision — essentially the Fed’s top banking regulator — in January. And a month ago, Senate Republicans boycotted a vote in protest of Raskin’s nomination, halting a slate of pending nominees for the central bank.

The renomination of Fed Chairman Jerome Powell for another term is also stalled. Even though Powell is enjoying support on both sides of the aisle, he hasn’t been fully confirmed yet, leaving him with the title add-on “pro tempore” for now.

All this comes at a time when Fed policy has taken center stage amid rampant inflation. Consumer prices haven’t risen at this fast a pace since 1982.

The central bank is expected to raise interest rates by a quarter-percentage point this week in an effort to curb demand and bring prices under control.

Meanwhile, the White House continued to stand behind Raskin’s nomination. Biden has pledged to make the Fed more diverse in terms of both its gender and racial make up. The president also nominated Philip Jefferson and Lisa Cook to join the central bank. Cook would be the first Black woman to serve at the Fed in its history.

“Sarah Bloom Raskin is one of the most qualified people to have ever been nominated for the Federal Reserve Board of Governors — she previously served on the Board and she served as second-in-command at Treasury, both positions where she earned bipartisan Senate confirmation,” a White House official said.

The administration was working to line up bipartisan support for her confirmation, the official added, calling the adversity surrounding her nomination an “unprecedented, baseless campaign led by oil and gas companies.”

CNN’s Manu Raju and Phil Mattingly contributed to this report.

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