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(Reuters) -The U.S. Senate on Thursday confirmed World Bank economist Adriana Kugler to the Federal Reserve Board of Governors, where she will help set interest rates for the world’s biggest economy.
Kugler, whose research has focused on labor markets, is the first Latina to join the U.S. central bank’s board in its 109-year history. The vote was 53-45, with a few Republicans supporting a nomination that was championed by Democratic Senator Bob Menendez.
“It is time for Latinos to be taken seriously as an essential part of our American family and economy,” said Menendez, a Cuban American, noting that 62 million Latinos call the United States home.
Confirming Kugler, he added, “is about changing the face of leadership so that our institutions - these bodies that we entrust with the future wealth and prosperity of our country - can fully reflect the nation that they serve.”
The Senate on Wednesday also confirmed Fed Governor Philip Jefferson as Fed vice chair and Fed Governor Lisa Cook to a second term. Both Jefferson and Cook are Black, have a PhD in economics and had long careers in academia.
With Kugler’s addition, the Fed’s board now has its full seven members, who along with the central bank’s 12 regional bank presidents set monetary policy as the U.S. economy approaches a crossroads.
The Fed has raised interest rates by an aggressive 5.25 percentage points over the last 18 months in a bid to rein in inflation that, based on the personal consumption expenditures price index, surged to 7% last summer.
Since then, supply chains that were damaged during the coronavirus pandemic have continued to heal, easing the root cause of much of that inflation, and the U.S. central bank’s higher borrowing costs have helped cool demand and restore more balance to the labor market, Fed Chair Jerome Powell has said.
Now, with the PCE price index having risen just 3.3% in July, officials are weighing whether they have done enough to put it on track toward their 2% goal.
The Fed is widely expected to leave its benchmark overnight interest rate in the current 5.25%-5.50% range at its Sept. 19-20 policy meeting, as officials take time to assess the state of the economy.
They are also expected to leave the door open to another rate hike before the end of the year should price pressures reemerge.
Reporting by Ann Saphir; Editing by Paul Simao
