Menendez rejects any substitutes in push for Latino Fed nominee

Menendez’s position gives the White House some flexibility as it aims to fill the slot vacated by Lael Brainard, now President Joe Biden’s top economic policy adviser. But the New Jerseyan also said tapping a Hispanic person for another top vacant position, such as the Treasury Department’s chief economist or the open seat on Biden’s Council of Economic Advisers, wouldn’t be enough.

An administration official said the White House has floated those options to Menendez.

“Look, I’m not going to work against my own efforts,” Menendez said. “They have raised that there may be other positions as well, and if it’s as well, that’s great. But I don’t want to hear that it’s in place of.”

The vice chair search process is in a holding pattern while the White House figures out how to satisfy the senator, who has gotten support for his push from fellow members of the Congressional Hispanic Caucus, as well as other lawmakers, such as Sen. Raphael Warnock (D-Ga.).

Northwestern University professor Janice Eberly, a former Treasury official under President Barack Obama, has been seen as a frontrunner for the vice chair job.

A Latino person has never had a vote on interest rate policy at the Fed, something that has rankled Menendez for years. He voted against Powell’s confirmation to a second term to protest that multiple regional Fed president jobs have been filled in recent years, and none of them have gone to Hispanic candidates.

The administration official said one option could be to elevate Philip Jefferson, appointed to the Fed last year by Biden, to vice chair and pick a Latino nominee for the open board seat. (This option was previously reported by the Wall Street Journal.)

The vice chair position usually goes to a Ph.D. economist with an extensive background in monetary policy, a relatively limited group of people, whereas the pool of candidates for other board seats has traditionally been much bigger.

Sen. Elizabeth Warren (D-Mass.) said it was important to fill the No. 2 spot soon.

“We need a person who has a demonstrated record for holding banks accountable, and someone who will push back against Chair Powell, reminding him that the Fed does not have one job: inflation,” she told reporters Wednesday. “It has two jobs: inflation and jobs.”