Washington (United States) (AFP) – Lisa Cook, the first Black woman to serve on the powerful US Federal Reserve Board of Governors, has come under the spotlight as President Donald Trump steps up pressure on the central bank. Cook was one of former president Joe Biden’s choices to fill open seats on the Fed board — a seven-member body guiding US monetary policy — and she took office as a Fed governor in May 2022. The daughter of a Baptist chaplain and a professor of nursing, Cook bears physical scars from racism after she was attacked as a young child while involved in an effort to integrate racially segregated schools in the state of Georgia.
Before joining the Fed, she dedicated much of her research to the effects of discrimination on the productive capacity of the world’s largest economy. Even though she kept a relatively low profile as a Fed governor, she came under scrutiny last summer as Trump sought her immediate removal over claims of mortgage fraud. The Fed makes decisions on interest rates independently from the White House, but Trump has repeatedly criticized the central bank for not lowering borrowing costs more quickly. Its independence could come under question — with consequences for the economy — as the Trump administration intensifies pressure on the bank, including by opening an investigation into Fed Chair Jerome Powell.
The outcome of Cook’s case will be crucial in determining how much discretion the president has when it comes to removing key Fed officials. She vowed Wednesday to uphold Fed independence for as long as she serves at the central bank. “This case is about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or will succumb to political pressure,” she said in a statement after the hearing. She previously rejected Trump’s attempt to oust her, saying he had no authority to do so. The Supreme Court has allowed her to remain in her role for now.
– An academic economist – Prior to becoming a Fed governor, Cook was a professor of economics and international relations at Michigan State University. She earned an economics degree from Oxford University and a doctorate from the University of California, Berkeley. In 2023, she was reappointed to the Fed’s board and sworn in for a term ending in 2038. At the central bank, Cook has voted with Powell in policy decisions, like most of her colleagues. These included instances when the bank started cutting interest rates and when it decided to put a pause on rate reductions.
She has been described as a “dove” at times, a term referring to someone who tends to support lower rates. But in a June speech, she warned of longer-term risks surrounding inflation and said that the Fed’s cautious approach to rate cuts was well positioned to respond to developments. Cook’s opponents have in the past questioned her qualifications, criticisms that her supporters say are fueled by her race. “I have been the target of anonymous and untrue attacks on my academic record,” Cook told lawmakers in 2022. Other board members, including Powell, are not trained economists.
Cook speaks five languages, including Russian. She also specializes in international development economics, having worked on topics such as Rwanda’s recovery following the 1994 genocide. In addition, she has researched inequality in the labor market, a key area of Fed focus. Cook grew up in an area of the United States where public swimming pools were destroyed to avoid opening them up to Black people, and was one of the first Black children to attend a previously segregated school. She has studied lynchings and patents issued to Black entrepreneurs, arguing that discrimination has held back the entire society, not just the direct victims of injustice.
© 2024 AFP
