Biden Names Fed Vice Chair Brainard to Lead Economic Policy Team

Choice of dovish advisor comes amid shakeup in administration's staff

Lael Brainard

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  • President Biden named Fed Vice Chair Lael Brainard to head the White House's economic policy team.
  • Lael Brainard has a reputation for promoting accommodative monetary policy.
  • The appointment may signal Biden's desire for pausing interest rate hike's sooner rather than later as he reportedly prepares for a re-election campaign.

President Biden on Tuesday named Federal Reserve Vice Chair Lael Brainard, known for her dovish views, to head the White House's economic policy team.

Biden appointed Brainard the director of the National Economic Council, replacing Brian Deese, who resigned earlier this month when Jeff Zients replaced Ron Klain as Biden's chief of staff. Klain and Deese were original members of Biden's staff when he took office in January 2021.

"Lael, one of the country’s leading macroeconomists, brings an extraordinary depth of domestic and international economic expertise, having previously served at CEA, NEC, the Treasury Department and the Federal Reserve," President Biden said in a statement.

Brainard joined the Fed in 2014 and ascended to her current role when Biden nominated her. She and Jared Bernstein, whom Biden said he would nominate as chair of the White House Council of Economic Advisers, will serve as the administration's primary economic advisors.

Viewed as less restrictive on monetary policy than many of her central bank colleagues, Brainard joins Biden's economic team as the Fed tries to reduce the worst U.S. inflation in four decades without steering the economy into a recession.

The Fed has raised interest rates repeatedly in the past year, boosting its benchmark rate to 4.5%-4.75% from 0-0.25%. The annual rate of inflation in the U.S., as measured by the Consumer Price Index, has slowed to 6.4% from a peak of 9.1% in June but remains considerably higher than the Fed's 2% target.

The Fed has indicated it would push its benchmark rate past 5% before considering a pause in its rate hike campaign.

Given her dovish reputation, some may perceive Brainard's appointment as a signal from Biden that he sides with pausing rates sooner than later — a nod to consumers facing higher borrowing costs amid recession concerns as Biden reportedly gears up for a 2024 re-election campaign.

However, Brainard has consistently joined other members of the Federal Open Market Committee (FOMC) in voting for rate hikes in the past year, including an increase of 0.25% at the FOMC's latest meeting two weeks ago.

Brainard earned a Ph.D in economics at Harvard and worked as a member of the National Economic Council during the Clinton administration. In the Obama administration, she served as the Department of Treasury's under secretary for international affairs prior to her Fed appointment.

Her husband, Kurt Campbell, currently serves on the National Security Council, specializing in Asian relations.

Bernstein also has a reputation for accommodative, progressive economic policy. In his past work at the Economic Policy Institute and in the Clinton and Obama administrations, has has focused on labor markets, income inequality and concerns about the U.S. middle class.

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  1. The White House. “President Biden Announces Key Members of his Economic Team.”

  2. U.S. Bureau of Labor Statistics. “Consumer Price Index Summary.”

  3. Federal Reserve Bank of Philadelphia. “The Fed and the Economy: Where We’re Going, Where We’ve Been.”

  4. "Federal Reserve issues FOMC statement."

  5. Reuters. "Who is Jared Bernstein, new chief White House economist?"