Susan Collins to become the first Black woman to lead a U.S. central bank at Boston Fed

Collins, who earned a doctorate in economics at the Massachusetts Institute of Technology, replaces Eric Rosengren, who stepped down last year. 

“Collins is an international macroeconomist with a lifelong interest in policy and its impact on living standards,” the Boston Fed said in a statement Wednesday. She was approved by the Fed’s Board of Governors after selection by the Boston directors.

Rosengren resigned in September, following revelations about his financial trading activity during the pandemic. He said his resignation was due to a serious health condition. Dallas Fed President Robert Kaplan also stepped down, linking the move to focus on his financial disclosures.

The Boston Fed holds one of the four rotating slots on the interest-rate setting Federal Open Market Committee this year. Philadelphia’s Patrick Harker stepped in as an alternate to cast Boston’s vote at the January meeting.

Start date

Collins will take up the Boston Fed post on July 1, after the end of the academic year. She currently serves as the University of Michigan’s provost and executive vice president for academic affairs.

“It is a remarkable advancement when you consider that America had a Black president before any of the 12 regional banks had a Black president,” said Aaron Klein, senior fellow in economic studies at the Brookings Institution. “Hopefully Dr. Collins will bring a fresh perspective to the Fed, which could benefit from new thinking.”

At the next FOMC gathering, on March 15-16, policy makers are widely expected to begin raising interest rates in an effort to rein in inflation that’s vastly overshooting their 2% target. The panel is also set to hold further discussions on plans to begin shrinking the Fed’s bond portfolio later this year.

Collins has attended the annual Jackson Hole central banking symposiums in the past, and spoke virtually at the 2020 conference with Chair Jerome Powell on the Fed’s new policy framework—which features allowing the job market to run hotter than in the past, and tolerating an overshoot of the 2% inflation target to make up for undershooting in the past.

Higher target

In a 2019 interview with Yahoo Finance, Collins said she would favor considering raising the 2% inflation goal in order to target maximum employment gains. “Being a little bolder there would be helpful,” she said.

Besides the Boston and Dallas Fed positions, the Fed board in Washington has three vacancies. President Joe Biden has nominated Sarah Bloom Raskin to be vice chair for supervision, with economists Lisa Cook and Philip Jefferson slated as governors.

If Cook wins Senate confirmation, she will become the first Black woman to serve on the Board of Governors. 

Progressive Democrats have been pressing for greater diversity in leadership positions at the Fed, which has been dominated by White males. Appointments at the Boston and Dallas Fed banks have been under scrutiny by some members of the Senate Banking Committee, pushing Powell to make the Fed more diverse.

The incoming Boston Fed president grew up in New York City to Jamaican parents and became a U.S. Citizen in 1997, according to Wednesday’s statement. She is married to Donald R. Vereen, Jr., a doctor who trained at Harvard and Tufts Universities and at Boston area medical institutions. The couple has two adult children.