Lael Brainard, the second-in-command at the Federal Reserve, is a contender to become the next top economist at the White House, in what would be a major shake-up for the US central bank as it grapples with the worst inflation problem in decades.
The Biden administration is considering Brainard, who served as under-secretary for international affairs at the Treasury department during Barack Obama’s administration, to replace Brian Deese as the next head of the National Economic Council, said people familiar with the matter.
Deese has held the position since 2021 and helped to steer the White House’s economic policy through successive shocks from Covid-19 and the inflation surge that followed. While Deese has been expected to leave the White House, there is no set date for his departure.
Other contenders are in the mix for the job, and Biden has not made a final decision on the role, people familiar with the matter said. Also under consideration are Gene Sperling and Bharat Ramamurti, current White House economic officials, as well as Sylvia Mathews Burwell, the former White House budget director and president of American University.
Brainard being considered for the role was first reported by the Washington Post.
If chosen, her departure would leave vacant a top leadership position at the Fed as it contends with how much more to raise its policy rate after its most aggressive campaign since the early 1980s. Having lifted the federal funds rate more than 4 percentage points since March via a string of jumbo 0.75 percentage point rate rises, officials are preparing to revert to more usual quarter-point increments at their upcoming policy meeting next week.
Brainard, a Democrat who has been at the Fed for almost a decade, has long been one of the most dovish voices on the Federal Open Market Committee, advocating for a prudent approach to tightening monetary policy and taking into consideration potential economic and financial risks associated with rapidly rising borrowing costs.
She has also pushed for more stringent regulation of the nation’s biggest banks as well as for the central bank to more directly incorporate climate-related risks into its oversight responsibilities — positions that earned her plaudits from the progressive wing of the Democratic party.
Ahead of her nomination to the vice-chair position in November 2021, Brainard was also considered a leading contender for the top job at the Fed and before that, Treasury secretary.