Why Lisa Cook is Making Headlines at the Federal Reserve

SOURCE: Brookings Institue

For the first time in the Federal Reserve System’s one hundred and twelve year history, a United States President is attempting to remove a Governor from the Board. Dr. Lisa Cook, an American Economist and the first Black woman to sit on the Federal Reserve Board of Governors, has responded to calls for her resignation by the current administration on the basis of “for cause” by stating, “no cause exists under the law, and he [, The President,] has no authority to do so”.

Before her appointment to the Federal Reserve, Cook spent her early career as a senior advisor on finance and development in the U.S. Department of Treasury's Office of International Affairs. She went on to serve as a professor of economics and international relations at Michigan State University. Some of Cook's research papers that show how deep-rooted racial violence, gender disparities, and segregation in rural areas is in our economic system include:

• Violence and Economic Activity: Evidence from African American Patents, 1870 to 1940

• Rural Segregation and Racial Violence: Historical Effects of Spatial Racism

• Can addressing inequality unleash economic growth?

• Addressing gender and racial disparities in the U.S. labor market to boost wages and power innovation

After serving as a senior economist on President Obama's Council of Economic Advisors, Cook went on to serve as director of the American Economic Association Summer Training Program and a research associate at the National Bureau of Economic Research.

In 2022, Cook made history as she became the first black woman to ever serve on the Federal Reserve board. She was reappointed for a 14 year term in 2023, which was confirmed with a 51-47 vote. 

So, what does Cook, along with the other board members, do on the Federal Reserve Board? The Federal Reserve Board is the main governing body of the Federal Reserve System. With this, the board oversees the Federal Reverse Banks as well as implements and looks over monetary policy. More specifically, they navigate and supervise the stability of the U.S. financial system. 

Cook and her knowledge on economics, especially her research on the ramifications of current gender and race disparities and its effect on economic standpoints, has been a critical voice in shaping domestic economic policy to address the systemic roots of wealth disparities.

Her work, and the threats to her legacy, highlight the current administration’s efforts to political commitment to dismantling diversity, equity, and inclusion based programming. In response, five hundred and ninety-three economists and Nobel Laureates authored a reminder to legislators and the general public that “Good economic policy requires credible monetary institutions. Credible monetary institutions, in turn, require the independence of the Federal Reserve.”