Lael Brainard of the Federal Reserve Board will listen at an event hosted by The Economic Club of New York in New York, USA, on Tuesday, September 5, 2017.
Mark Cowes Larich | Bloomberg | Getty Images
Lael Brainard is often outlier.
In her role as one of the seven governors of the Federal Reserve Board, she has a habit of opposed unanimous motions in other respects of rolling back financial regulations. No governor has challenged since 2011 until she first challenged in 2018.
With the exception of a few dissenting opinions each year, only three of her colleagues have challenged in recent years.
One of Brainard’s recent dissents was the Volcker Rule, a breakthrough in the Dodd-Frank Act of the financial crisis in June 2020, when the Fed restricted transactions with banks’ private equity firms and hedge funds. It happened when I considered the change.
Brainard voted against the rule change. She warned that the proposal could weaken core protection and allow banks to “return to the dangerous activities seen in the 2008 financial crisis.”
Brainard is the only Democrat on the Fed’s board, so her dissent (12 in 2020 alone) was ignored.
But now someone is listening. And his name is Joe Biden.
The president elected Brainard as Vice-Chairman of the Federal Reserve Board. It is one of the most powerful economic positions in the world and is probably the apparent heir to the role of chairman of the Federal Reserve.Biden elected Chairman Jerome Powell on Monday Leading the Federal Reserve for the second term..
The work of the Federal Vice-Chairman talks about how interest rates are set, the balance between employment and inflation, and the direction of regulation for the country’s largest banks such as JPMorgan Chase, Bank of America and Wells Fargo.
“There’s still more work to be done, but in the last decade, we’ve made tremendous progress by getting Americans back to work and moving the economy back. That success is crucial to the economic agenda I’ve pursued. Evidence: The actions taken by the Federal Reserve under Chairman Powell and Dr. Brainard to help overcome the worst economic recession in modern American history and follow the path to recovery. “
“As I said before, we can’t go back to what it was before the pandemic. We need to build a better economy. I’m convinced that Chair Powell and Dr. Brainard are focused on keeping inflation low. It is stable and full employment will strengthen the economy more than ever. ” “Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change and to stay ahead of new risks in our financial system. doing.”
A Federal Reserve spokesman refused to make Brainard available for interviews.
Biden on Monday Announced his intention to nominate 59 years old Brainard represents Powell, who helps manage the US economy through a surge in inflation, a steady but uneven recovery, and slowing labor force participation.
Brainard was thought to be being considered for top work for the days leading up to the White House announcement. However, Republican Powell received high praise from the leaders of both parties for the Fed’s actions in 2020 as companies across the country were closed thanks to Covid-19.
Economists say the $ 120 billion monthly Treasury and mortgage securities purchases by the Fed with near zero interest rates are the main reason for the faster-than-expected rebound, saving the U.S. economy from a more severe recession. I am.
Prior to the announcement on Monday, Wall Street speculated that Brainard could also be the Fed’s vice-chairman of oversight, a central bank official responsible for bank regulation. The White House said Monday that the president would announce candidates for the job at some point in December.
“Brainard was Biden’s obvious choice because the chair did not appoint Powell,” Gas Forcher, chief economist at PNC, said in an email. “Although the difference between Powell and Brainard in monetary policy was subtle, Brainard was generally more rigorous in the banking industry than Powell. It’s surprising that Brainard was appointed Vice-Chair instead of Supervisory Vice-Chair. It was a move. “
The administration’s decision to promote Brenard to Vice-Chair is due to progressive lobbying and Democrats such as Senator Elizabeth Warren of Massachusetts, Sheldon Whitehouse of Rhode Island, and Jeff Merkley of Oregon.
Senator Elizabeth Warren (D-MA) was Secretary of the Treasury Janet Yellen at a Senate Bank, Housing, and Urban Affairs Commission hearing on the CARES Act on September 28 at the Hart Senate Office Building in Washington, DC, USA. Asks the President of the Federal Reserve Board, Powell. , 2021.
Kevin Deechu | Reuters
From summer to autumn, Warren encouraged Biden to find a tougher Federal Reserve chairman at the bank. And leave Powell, which she called the “dangerous man.” Others, including the Whitehouse and Merkley, Consider climate change as a serious threat And banks will restructure the way they think about that risk.
Brainard has made speeches in recent months on topics such as climate change and racially-based economic disparities exacerbated by the Covid-19 pandemic.
she I told an undergraduate student at Harvard University in February The unemployment rate under the Ministry of Labor heading is a useful indicator, but it tends to hide inequality when taken alone. Instead, she said she sees widespread and comprehensive maximum employment as “an important guidepost for monetary policy.”
Some viewed such speeches as a less subtle attempt to distinguish themselves from Powell, who was hesitant to extend the Fed’s jurisdiction to topics that could be considered partisan. rice field.
Senate Banking Commission Chairman Sherrod Brown, D-Ohio, immediately praised Biden’s decision to promote Brainard.
“Dr. Lael Brainard fought for a stronger and fairer economy, where workers share the growth and prosperity they generate and their efforts are not bet by reckless Wall Street banks. I spent my life with him, “he said in the release.
Senator Pat Toomey, the Commission’s top Republican, praised the president’s decision to nominate Powell and was concerned about Brenard’s tendency to support more banking regulations in the release. He said he was looking forward to meeting and discussing with her.
Although it was created by Congress and its leaders have been confirmed by the Senate, the Fed has long emphasized its political independence.
Board members serve a partial 14-year term to isolate them from the daily needs of elected civil servants.But that power is bestowed In a narrow mission: Use monetary policy to maximize employment, stabilize prices and ease long-term interest rates.
Brainard did not necessarily appeal to the Democratic progressives.
Just twelve months ago, speculation about who Biden would use to become Treasury Secretary flew around, and some progressives described Brenard as too modest for his role.
Jeff Hauser, Executive Director, Revolving Door Project Proceedings against Brainard In a blog post dated October 15, 2020.
“We need a Treasury Secretary to overcome Bill Clinton and early Obama Democratic technocrats sticking to budget shortages presented by fellow Brainard and colleagues like Robert Rubin and Timothy Geithner,” he said. His colleague wrote.
“Brainard has proved that he will not face climate issues at the Fed. As Treasury Secretary, how can you trust her to do so?” They added. The revolving door project is part of the Center for Economic Policy Research, a left-wing think tank.
On June 4, 2019, Federal Reserve Chairman Jerome Powell will take a photo with the Federal Reserve Bank of Chicago (L) at the Federal Reserve Bank of Chicago, Chicago, Illinois.
Ann Safir | Reuters
Brainard too Pushed the digital dollar case And it is seen as the main voice of the Fed’s financial innovation. She said at a spring meeting that central bank-backed cryptocurrencies could make it easier to serve nearly one in five Americans who are considered “bank shortages.” rice field.
“The Federal Reserve continues to promise that people will have access to safe, reliable and secure payment methods, including cash,” she said at a meeting released by Coin Desk in May. .. “As part of this effort, we need to investigate and predict the extent to which household and corporate needs and preferences may move further into digital payments over time.”
Brainard is not a stranger to the Fed and has been its main governing body known as the Board since 2014. If confirmed by a majority of the Senate, Brainard will serve as Vice-Chair for four years after the current Vice-Chair Richard Clarida. The term will expire next year.
Both her life and career are characterized by international affairs.
Brainard was born a diplomat in Hamburg, Germany, and grew up in East Germany and Poland during the Cold War. Her education received a PhD. Majored in Economics at Harvard University in 1989.
Her research focused on the relationship between international trade policy and employment. She served at the Clinton Administration’s National Economic Council in the 1990s and was one of the president’s chief advisors to eight industrialized country groups.
After the George W. Bush administration, Brainard returned to the US Government in 2009 as Under Secretary of International Affairs for the Treasury, when she became the highest-ranking woman in the ministry’s history. As Chief Diplomat of the Ministry of Finance, she represented US interests through the global financial crisis and the European debt crisis.
She resigned from the Treasury post in 2013 after it was revealed that former President Barack Obama would nominate her to the Fed’s board of directors. She began her 14-year term at the Central Bank in June 2014.
For most of her time in the Federal Reserve, her quiet ambitions and data-driven work have loved her to her Republican colleagues, including Powell. These qualities also made her a routine candidate for the country’s top economic posts as an appeal to senators on both sides of the aisle.
However, some believe that Brenard’s confirmation odds have declined somewhat among Republicans, as the Biden administration has prolonged the decision on who to appoint.
Her recent speech on climate change and other progressive priorities, coupled with a long track record of supporting banking regulation, is believed to have eroded some support among Republicans over the past decade.
Her history of supporting low interest rates at the risk of promoting inflation, while boosting employment, may no longer be prevalent in consumer-priced economies. It is rising with the fastest clip since 1990.
Who is Lael Brainard?What you need to know about Biden’s Federal Reserve Pick
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