Biden Will Name Fed’s Lael Brainard as His Top Economic Adviser

(Bloomberg) -- President Joe Biden has decided to name Federal Reserve Vice Chair Lael Brainard as his top economic adviser, with an announcement coming as soon as Tuesday, people familiar with the matter said.

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In addition, according to the people, Jared Bernstein, a member of the Council of Economic Advisers, is considered likely to be named its chair, replacing Cecilia Rouse, who is stepping down.

The president’s selection of Brainard to replace outgoing NEC Director Brian Deese places her alongside another high-profile former Fed official, Treasury Secretary Janet Yellen, as crucial players on economic policy amid the continuing battle with inflation and as Biden prepares for a likely reelection campaign.

They will assume a prominent role as the administration pivots its focus to implementing laws like the Inflation Reduction Act passed during the president’s first two years in office.

Brainard’s move to the White House also creates an opening at the central bank as it considers when to pause the most aggressive campaign of interest-rate hikes in four decades.

The White House declined to comment on the impending move Monday night. A Fed spokesman also declined to comment. Brainard could not be reached for comment. The people were granted anonymity to discuss the decision because Biden hasn’t announced it yet. The timing of the announcement could slip to later in the week.

Brainard has been considered one of the Fed’s most dovish members. While the central bank has been unified in its resolve to quickly raise interest rates to battle inflation, she indicated recently that this goal might be achieved without too much damage to employment.

It’s not clear who Biden will nominate to succeed her at the Fed or when he will make that decision.

Brainard is regarded as a thought leader on progressive policies — a nod to a flank of the Democratic Party that has harbored skepticism of Biden. She has previously been a candidate for other major roles, including Treasury chief and for Fed chair.

Deese announced on Feb. 2 that he planned to depart the White House, and is expected to do so later this month. “He has helped steer my economic vision into reality, and managed the transition of our historic economic recovery to steady and stable growth,” Biden said in a statement.

Brainard has been in the vice chair role since May 2022, following a relatively smooth nomination process and confirmation vote in the Senate that included support from seven Republicans.

Rouse intends to return to academia.

Brainard was nominated as a Fed governor in 2014 by President Barack Obama. She was a deputy director of the NEC under President Bill Clinton and also served at the Treasury during his administration.

Between 2001 and 2009, she was a senior fellow and then a vice president at the Brookings Institution in Washington. She taught applied economics at the Massachusetts Institute of Technology in the early 1990s.

--With assistance from Saleha Mohsin and Catarina Saraiva.

(Updates with Rouse’s plans, Brainard’s career, starting in 12th paragraph.)

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