Biden names Fed vice chair as top economic advisor
Feb 15, 2023 - 03:52 AM
WASHINGTON — US President Joe Biden has chosen Federal Reserve Vice Chair Lael Brainard to be his top economic advisor, ahead of a potential reelection campaign and as the administration battles stubbornly high inflation.
Brainard joins Treasury Secretary Janet Yellen among the country’s key economic policy officials, as the government works on rolling out major laws such as the Inflation Reduction Act.
Brainard replaces outgoing National Economic Council director Brian Deese, who helped craft massive spending bills and steer a path out of the pandemic shutdown.
According to a White House statement, Brainard will be the second female director of the NEC.
“Lael, one of the country’s leading macroeconomists, brings an extraordinary depth of domestic and international economic expertise,” said Biden in a statement.
“She is a trusted veteran across our economic institutions, and understands how the economy affects everyday people,” he added.
In a separate statement, the Fed said Brainard has submitted her resignation, effective on or around February 20.
Biden also announced Tuesday his intent to nominate Jared Bernstein as chair of the Council of Economic Advisers.
Bernstein currently serves as a member of the council and was formerly chief economist to Biden when he was vice president.
Calling Bernstein one of his closest and longest-serving economic advisors, Biden said he is “an expert on worker empowerment and a worker-centric economic policy.”
His role requires Senate confirmation, and he succeeds Cecilia Rouse.
A fellow member of the president’s Democratic Party, Brainard is known as a skillful negotiator and specialist in international trade.
She has been a central bank governor since being appointed to the Fed Board of Governors in 2014 by then-president Barack Obama, and is considered one of the Fed’s more dovish members.
Her move comes as the Fed pushes on with a campaign to cool inflation, mulling when to pause its interest rate hikes.
“Until her successor is confirmed, her departure makes the Fed a bit more hawkish,” said David Wessel, a senior fellow in economic studies at Brookings.
Biden has not formally announced his reelection bid but is expected to run again next year.
Before joining the Fed, Brainard worked in Obama’s Treasury Department as under-secretary for international affairs.
She was previously viewed as a potential pick for Biden’s Treasury secretary, though she was passed over in favor of Yellen, a former Fed chair and the first woman to serve in the role.
If she fares well, Wessel said, Brainard “becomes a strong contender to be Treasury Secretary in a second Biden term.”
EY-Parthenon chief economist Gregory Daco told AFP that Brainard “has all the qualities that are needed” for the new role.
She also knows Yellen well, and this “should facilitate the implementation of the various policies that Biden wants to put in place.”
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