Fed tackles inflation with its most diverse leadership ever

JACKSON HOLE, Wyoming (AP) — When Diane Swonk first attended the Federal Reserve’s annual economic conference in Jackson Hole in the late 1990s, there was a happy hour for women who attended the event. It barely filled a single table.

Now, the “Women at Jackson Hole” happy hour draws dozens of female economists and high-level decision-makers, from the United States and overseas.

“I'm just glad that now there’s a line for the ladies’ room,” said Swonk, a longtime Fed watcher who is chief economist for the accounting giant KPMG.

It’s not just at Jackson Hole but also in the Fed’s boardroom where its leadership has become its most diverse ever. There are more female, Black and openly gay officials contributing to the central bank’s interest-rate decisions than at any time in its 109-year history. Many are also far less wealthy than the officials they have replaced.

Over time, economists say, a wider range of voices will deepen the Fed’s perspective as it weighs the consequences of raising or lowering rates. It may also help diversify a profession that historically hasn’t been seen as particularly welcoming to women and minorities.

“Broadly, that's helpful,” said William English, a former senior economist at the Fed who teaches at the Yale School of Management. “There's evidence that diverse groups make better decisions.”

The central bank, as it is doing now, raises its benchmark short-term rate when it wants to lower inflation, and reduces it when it wants to accelerate hiring. Such moves, in turn, affect borrowing costs throughout the economy — for mortgages, auto loans and business loans, among others.

On Friday, in his speech to the Jackson Hole symposium, Chair Jerome Powell stressed that the Fed plans further rate hikes and expects to keep its benchmark rate high...