Lael Brainard emerges as a candidate to become top White House economist

Lael Brainard, second-in-command at the Federal Reserve, is a contender to be the next top economist at the White House, in a major reshuffle to the US central bank as it struggles with the worst inflation problem in decades.

According to people familiar with the matter, the Biden administration is considering Brainard, who served as undersecretary for international affairs at the Treasury Department under the Barack Obama administration, to replace Brian Deese as head. followed by the National Economic Council.

Deese has held the position since 2021 and helped guide the White House’s economic policy through successive shocks from Covid-19 and the subsequent spike in inflation. Although Deese is expected to leave the White House, no date has been set for his departure.

People familiar with the matter said that in addition to Brainard there are other candidates for the position and Biden has yet to make a final decision on the role. Also under consideration are Gene Sperling and Bharat Ramamurti, current White House economic officials, as well as Sylvia Mathews Burwell, former White House budget director and president of American University.

Brainard is being considered for the role which was first reported by the Washington Post.

If chosen, her departure would leave a top leadership position at the Fed vacant as the agency faces how many more hikes in policy rates after its biggest campaign since. the early 1980s. After raising the federal funds rate by more than 4 percentage points since March through a series of massive 0.75 percentage point rate hikes, officials are preparing to return to a normal level. more often quarter point increase at their upcoming policy meeting next week.

Brainard, a Democrat who was in raised for nearly a decade, has long been one of the most dovish voices on the Federal Open Market Committee, advocating a cautious approach to tightening monetary policy and considering economic risks and underlying financing associated with rapidly increasing borrowing costs.

She also pushed more strict regulations of the nation’s largest banks as well as for the central bank to more directly incorporate climate-related risks into its supervisory responsibilities — positions that have earned her praise from the industry. Democratic progress.

In front of her nominate for the position of vice president in November 2021, Brainard was also considered a leading candidate for the top job at the Fed and before that as Treasury Secretary.

If Brainard replaces Deese, the Biden administration will need to nominate another vice president, which has dramatically reshaped the top ranks of the central bank. In addition to nominating Jay Powell as chairman, the White House raised economists Chef Lisa and Philip Jefferson as governor with Michael Barr as vice president of oversight.

Biden’s original pick for the supervisor role, Sarah Bloom Raskin, was blocked by legislators who took issue with her call for regulators to be more proactive about climate-related financial risks.

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