By Howard Schneider

WASHINGTON (Reuters) – The Federal Reserve has removed a “Diversity and Inclusion” section from its website. Previous links to the central bank’s diversity standards and data regarding the racial, ethnic, and gender makeup of its economists and researchers now redirect to its home page.

The Fed declined to comment on the changes or their impact on hiring practices. According to archived versions of the central bank’s website, this alteration occurred shortly before or after President Donald Trump’s inauguration.

In one of his initial acts as president, Trump issued an executive order directing government agencies to “terminate, to the maximum extent allowed by law,” any roles related to diversity, equity, and inclusion efforts, alongside any associated plans or contractor performance requirements.

While Trump’s order criticized the Biden administration’s “forced illegal and immoral discrimination programs,” the diversity standards removed from the Fed’s website trace back to 2016 and stemmed from reforms mandated by the Dodd-Frank financial reforms enacted by Congress in 2010.

The Fed has long faced challenges in diversifying its workforce, drawing primarily from an economics profession that has struggled to cultivate a diverse pipeline of researchers and PhD holders reflective of the population.

Fed Chair Jerome Powell has positioned this issue as crucial for institutional strength, arguing that organizations that prioritize broad hiring practices typically achieve superior outcomes. He stated at a conference in 2021, “Throughout my career, I have seen that the best organizations often have a strong commitment to diversity and inclusion.” Powell mentioned the Fed’s initiatives to enhance inclusivity, particularly efforts to recruit from historically Black colleges and universities and Hispanic-serving institutions. Notably, in 2023, Powell became the first Fed chief to visit Atlanta’s Spelman College, a prominent historically Black women’s institution, which counts Fed Governor Lisa Cook among its alumni.

IMPACT ON HIRING UNCLEAR

Beyond the Fed, diversity, equity, and inclusion programs aim to create opportunities for women, ethnic minorities, LGBTQ+ individuals, and other groups historically underrepresented. Critics, including Trump and his supporters, argue these programs unfairly disadvantage other Americans, while civil rights advocates maintain they are essential to address enduring inequities and systemic racism.

The future interaction of the Fed with its counterparts on diversity issues remains uncertain, given its withdrawal from a climate change consortium prior to Trump’s inauguration. The actual impact of Trump’s executive order on diversity and inclusion on hiring practices at the Fed and implications for the 12 regional Fed banks, which operate under separate boards but are influenced by the Board of Governors, is also unclear. The Federal Reserve System employs around 20,000 individuals responsible for setting monetary policy and supervising banks, alongside managing the nation’s payment systems.

Recent changes to some regional Fed banks indicate that previously available pages on diversity and inclusion now either redirect to the home page or result in “Page Not Found” messages.