By Howard Schneider
WASHINGTON (Reuters) – The Federal Reserve has scrubbed a “Diversity and Inclusion” section from its website, with previous links to a statement of the U.S. central bank’s diversity standards and data on the racial, ethnic and gender makeup of its economists and researchers now defaulting to its home page.
The Fed would not comment on the change or the implications for its hiring and recruitment practices. According to versions of the central bank’s website available on the Wayback Machine internet archive, it occurred in the days just before or after President Donald Trump’s inauguration on Monday.
Trump, in one of his first actions as president, issued an executive order instructing government agencies to “terminate, to the maximum extent allowed by law,” any jobs involved with diversity, equity and inclusion efforts, along with any plans associated with those efforts or performance requirements for contractors.
While Trump’s executive order refers to what it called the Biden administration’s “forced illegal and immoral discrimination programs,” the diversity standards removed from the Fed’s website dated to 2016 and were developed as part of reforms legally required by the 2010 Dodd-Frank financial reforms passed by Congress.
Finding ways to diversify hiring has been a longstanding issue at the central bank, which draws heavily from an economics profession that has struggled broadly to produce a pipeline of researchers and holders of PhD degrees more reflective of the population.
Fed Chair Jerome Powell has framed the issue not just as one of equity, but of institutional strength and performance. He has argued that, from his days as a Wall Street lawyer and private equity investor with the Carlyle Group (NASDAQ:CG), the firms which cast the broadest net in hiring and recruitment had the best outcomes.
“Throughout my career, in both the public and the private sectors, I have seen that the best and most successful organizations are often the ones that have a strong and persistent commitment to diversity and inclusion,” Powell said at a 2021 conference on the issue that the Fed sponsored with other central banks, a recurring event joined by institutions like the European Central Bank and the Bank of Canada.
“We are working to foster an inclusive workplace environment where staff can feel comfortable at work and to promote a similarly inclusive culture within the profession,” he said, noting the Fed’s efforts “to broaden our reach by recruiting at historically black colleges and universities and Hispanic-serving institutions.”
In 2023 he became the first Fed chief to visit Atlanta’s Spelman College, a historically black and female institution that includes Fed Governor Lisa Cook among its alumnae.
IMPACT ON HIRING UNCLEAR
Beyond the Fed, diversity, equity and inclusion programs were established to promote opportunities for women, ethnic minorities, LGBTQ+ people and other traditionally underrepresented groups. Trump and his supporters say those programs unfairly discriminate against other Americans, while civil rights advocates say they are needed to address longstanding inequities and structural racism
It is not clear how the Fed may interact with its peers over diversity issues in the future, though the central bank did withdraw from a central consortium on climate change just prior to Trump’s inauguration.
It is also unclear how Trump’s executive order on diversity and inclusion will actually change hiring and recruitment efforts at the Fed or how it will influence practices at the 12 regional Fed banks, quasi-private institutions that are governed by separate boards of directors but influenced also by the central bank’s Washington-based Board of Governors.
The combined system employs around 20,000 people, with responsibility for setting monetary policy but also supervising banks and running the nation’s payment systems.
The websites of at least some of the regional Fed banks also have been changed, with prior pages on diversity and inclusion defaulting to the home page or returning a “Page Not Found” message.