Federal Reserve Board Vice Chair Lael Brainard speaks in Washington on Sept. 23, 2022.Manuel Balce Ceneta/The Associated Press
Federal Reserve Vice Chair Lael Brainard is a contender for the White House’s top economic policy position, joining a list that includes Deputy Treasury Secretary Wally Adeyemo and Commerce Secretary Gina Raimondo, two people familiar with the process said on Wednesday.
Brainard is currently in the number two slot at the U.S. central bank, where she commands an influential role over monetary policy and regulation as the Fed battles to bring down high inflation.
President Joe Biden is searching for a replacement for National Economic Council (NEC) Director Brian Deese, who is expected to leave soon. Interviews are still ongoing to replace him, according to the sources who declined to discuss an ongoing personnel process.
“Don’t have any personnel announcements to make,” said White House spokesperson Karine Jean-Pierre during a press briefing. “The president would love to see and wants to see Brian Deese stay as long as he can in the administration.”
The Fed declined to comment.
Biden is also expected to consider other contenders for the role, including Gene Sperling, a senior economic adviser to Biden in charge of pandemic stimulus spending who ran the NEC during the Clinton and Obama administrations, Sylvia Mathews Burwell, a former secretary of Health and Human Services in the Obama administration, Bharat Ramamurti, the NEC’s deputy director, the people said.
The next NEC director will help shape the Democratic administration’s economic policy, from executive orders to congressional spending bills and raising the debt limit, in the face of a more hostile U.S. House of Representatives, now controlled by Republicans. Biden’s team is also starting to craft an economic message for his expected 2024 re-election campaign.
Biden’s populist economic agenda has included a focus on strengthening labour unions, improving competition between companies, shifting the tax code by adding credits for parents, and championing industrial policy in areas like electric vehicles and semiconductor manufacturing to better compete with China.
But reducing high inflation became the administration’s top economic priority last year as rising costs began to anger voters. Administration officials think the Fed can help engineer a “soft landing,” where inflation and economic growth slow to more sustainable levels without throwing many Americans out of work.
The consumer price index rose 6.5% in 2022, but prices fell in December in a sign that inflation is starting to meaningfully decline. The unemployment rate also fell back to a five-decade low of 3.5% last month.
If Brainard, a Democrat, is tapped for the top NEC job, the Fed would be left with a key role unfilled for months at a point when it is still trying to glide inflation down without causing a recession.
Brainard has been at the Fed for almost a decade, with an increasingly powerful remit. She lost out on the top job when Biden renominated Fed Chair Jerome Powell, a Republican, in late 2021, but was elevated to be second-in-command.
Even before assuming that role, Brainard was a frequent dissenting vote against steps taken during former President Donald Trump’s administration and under Powell to loosen banking regulations, and called for the Fed to require financial firms to set aside more capital.
The Harvard-educated economist has also pushed the Fed to better understand how climate change might affect the macroeconomy and financial system, pitting her against some of her Fed colleagues.
She previously served as the Treasury’s point person on international affairs during the Obama administration.