WASHINGTON—Economist Philip Jefferson has called on the Federal Reserve to more closely consider how its policies shape the economic well-being of different groups of Americans. If confirmed for a seat on the central bank’s board, he may soon prod it to do so as it prepares to raise interest rates to combat inflation.
Mr. Jefferson, one of President Biden’s nominees to the Fed board, has spent much of his career in academia and is now the vice president of academic affairs and dean of faculty at Davidson College. Current and former colleagues of Mr. Jefferson describe him as a consensus-oriented, largely apolitical economist with deep knowledge of monetary policy.
At Mr. Jefferson’s Senate confirmation hearing Thursday, some Republicans are expected to ask if he would take a lax approach to curbing inflation, according to a GOP aide, pointing to his work on how changes in interest rates can have greater consequences for employment among low-skilled workers.
The White House didn’t make Mr. Jefferson available for an interview, and he didn’t respond to a request for one. But Kevin Hassett, a top economic adviser to former President Trump who worked with Mr. Jefferson at Columbia University, said he anticipates Mr. Jefferson would support raising rates to curb inflation.
“My guess is he won’t be a voice opposing measures to bring inflation back under control,” Mr. Hassett said. “There may be some risk that some people may try to take those writings and use them against him in the confirmation process.”
In a 2018 interview with a publication of the Minneapolis Fed, where he serves on an advisory board, Mr. Jefferson said the Fed should study the impact of monetary policy changes on different demographic groups.
“This is not to say that we should lose focus on the overall economy, which is the system’s responsibility,” Mr. Jefferson told the publication. “Rather, we should be aware of asymmetric or disproportionate effects because that knowledge allows us to re-evaluate a policy that we might otherwise do without such considerations.”
Economists who know Mr. Jefferson say he is likely to be sensitive to how interest-rate increases could affect economic conditions among different groups of Americans.
“Not to say he would discount the issue of inflation, but he would think about a variety of potential impacts,” said Margaret Simms, a nonresident fellow at the Urban Institute who knows Mr. Jefferson through the National Economic Association, a group for Black and other nonwhite economists that Mr. Jefferson led as president in 2005.
Mr. Hassett is among the observers and congressional aides in both parties who expect that Mr. Jefferson will be confirmed with bipartisan support in the 50-50 Senate, which would make him the fourth Black man to ever serve on the Fed board.
“He’s going to be an easy confirm,” Mr. Hassett added.
Mr. Jefferson, age 60, grew up in Washington, D.C., in a blue-collar neighborhood east of Capitol Hill, where he watched Walter Cronkite on the “CBS Evening News” regularly with his father, according to interviews he has given. With inflation and other economic developments dominating the news in the 1970s, Mr. Jefferson was first interested in becoming a banker when he enrolled in economics courses as an undergraduate at Vassar College.
In 1982, he participated in a summer economics program for minority students hosted at Yale University, where he said he was inspired to earn a Ph.D. in economics after learning from two Black professors there, Donald Brown and Gerald Jaynes.
After earning his Ph.D. in economics at the University of Virginia, he taught at Columbia and worked at the Fed before taking a job at Swarthmore College in 1997. In the 2018 interview with the Minneapolis Fed publication, Mr. Jefferson said he had never worked in an economics department with another Black economist, calling it “a long, lonely road professionally.”
He said in the interview that it was important for a more diverse range of people to join the field. “When you are a person who represents diversity, and you are engaged in the conversation, it changes the nature of the conversation…I think it is crucially important for public policy that we hear voices that represent diversity,” he said.
While much of Mr. Jefferson’s scholarship at first focused on technical questions in monetary economics, his focus broadened over his career to cover poverty and inequality.
In a 2008 paper, he concluded that recent economic stability had led to a lower risk of falling into poverty for all demographic groups except women-led and Black households. A 2012 piece that he co-wrote found a strong relationship between inflation and poverty calculated by income, and in 2018 he published a short book on poverty as part of an Oxford University Press series of introductions to various topics.
Over the course of his academic career, Mr. Jefferson has developed a deft bureaucratic hand, colleagues say, seeking to build broad agreement for decisions as economics department chair at Swarthmore before moving to an administrative post at Davidson. A member of Vassar’s board of trustees, Mr. Jefferson began a discussion that led to the group adopting a new investment plan in the fall that included not investing in fossil-fuel companies in the future.
“It was Philip who initiated that discussion; he wasn’t advocating for doing it or not doing it,” said Tony Friscia, chairman of Vassar’s board.
Stephen O’Connell, an economics professor who worked with Mr. Jefferson at Swarthmore, said the Fed’s efforts to tame inflation in the coming months could test Mr. Jefferson’s research background against his inclination toward consensus.
“He’s exactly at the point where his institutional chops are going to be up against the problem of diagnosing where the labor market is, and how to make that trade-off between how urgent it may be to tighten up and slow down inflation and what the collateral damage might be in the labor market,” he said. “There’s no ducking that choice.”
Write to Andrew Duehren at [email protected]
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