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The Fed: Biden could reshape the Fed with three nominations. Here are the top 5 contenders.

President Joe Biden stuck with Republican Jerome Powell to lead the Federal Reserve, but he’ll get another crack at reshaping the powerful central bank and giving it a more liberal tilt by filling three other key jobs.

The White House on Monday renominated Powell, 68, as chairman of the Fed and picked Lael Brainard to be vice chair. She is the only Democrat now on the central bank’s influential seven-member board of governors.

Read: After letting suspense build, Biden taps Powell for second term

Yet the president still has three seats to fill on the Fed board, fueling widespread speculation on Wall Street
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and in Washington over who he will choose and what it could mean for the central bank.

Read: Wall Street sees Powell as best choice to lead Fed even as inflation hits 31-year high

One seat on the board has been vacant for months and the impending departure of Fed Governors Randal Quarles and Richard Clarida will leave two more seats open.

Biden’s “statement today suggests that we can expect announcements on nominees as early as next month,” wrote Capital Economics analysts in a Monday note to clients. “It is those appointments that could generate a more market shift in outlook for monetary policy.”

In a speech Monday announcing Powell’s renomination, Biden said his forthcoming picks “will bring new perspective and voices” and “new diversity to the Fed, which is much needed and long overdue.”

Meanwhile, monetary policy could become an even more important tool for the Biden administration going foward, as it faces the possibility of a Republican takeover of Congress next year, according to Stephen Pavlick, Washington policy analyst for Renaissance Macro Research.

Democrats will soon “have a majority of the seats on the seven-member board and will likely push it to go beyond its dual-mandate to focus on liberal priorities like climate change, racial equity, and stricter Wall Street regulations, given that they are expected to lose control of the House in 2022,” Pavlick told MarketWatch.

“A Republican House takes fiscal stimulus off the table, which means the more dovish Fed Democratic appointees will rely more on monetary measures to boost the economy heading into 2024.”

Here are the top candidates:

Sarah Bloom Raskin is a former Fed Governor, who served under President Obama from 2010 to 2014, when she was tapped to serve as Deputy Secretary of the Treasury.

The Open Markets Institute, an anti-monopoly advocacy group, called on Biden to nominate Raskin to serve as the Fed’s vice chairwoman for supervision to lead the central bank’s bank oversight efforts. The institute argued she “brings deep regulatory expertise and a proven track record of consumer protection.”

Bloom Raskin is the wife of Democratic Rep. Jamie Raskin of Maryland.

William Spriggs is chief economist of the AFL-CIO and a professor at Howard University. A Black man, a Spriggs nomination would fulfill the Biden administration’s desire to bring more racial diversity to the Fed leadership, while his association with organized labor would likely garner him the support of that key Democratic constituency.

Bloomberg reported earlier this year that Spriggs has “the backing of several key White House officials and allies” for a role on the Fed board.

Lisa Cook, an economist at Michigan State University, is also being considered by the White House to fill an open seat , according to Axios. She served as a senior economist for President Obama’s Council of Economic Advisors and was a member of President Biden’s transition team.

“She would make history as the first black female member of the board and is said to be the choice of Senate Banking Committee Chairman Sherrod Brown,” the Ohio Democrat, wrote Ed Mills, a federal policy analyst at Raymond James, in a Monday note to clients.

Raphael Bostic is president of the Federal Reserve Bank of Atlanta and told Axios earlier this year that he often hears speculation he could be named to the board of governors. As a black man, he would add diversity to the body, and racial justice is an issue of concern for him.

“Dr. Bostic has written and spoken widely about diversity and inclusion in the banking system. These topics are important themes in the Biden administration, which could make him an attractive candidate,” Brian Gardner, chief Washington policy strategist at Stifel, wrote in a Monday note.

“However, Bostic’s views on prudential regulation and bank mergers are less publicized than his views on diversity and inclusion so he represents a bit of an unknown regarding financial regulation.”

Mary Daly is the president of the Federal Reserve Bank of San Francisco and has served at the regional bank in various capacities for more than two decades. Daly considers Treasury Secretary Janet Yellen a mentor, saying in 2018 that Yellen “made my career kind of explode” while Daly worked under her at the San Francisco Fed.

Daly, view as monetary dove, reportedly turned down a White House offer to move to Washington to join the Fed board.

Either Bostic or Daly would be the first openly gay person to serve as a Fed governor.

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