Lael Brainard has been a member of the Board of Governors of the Federal Reserve System (FRB) since June 2014, chosen by President Barack Obama to fill an unexpired term that ends on Jan. 31, 2026. She had been mentioned as a possible pick by President Joe Biden to succeed Jerome Powell as Fed chair, with particular backing from the left wing of the Democratic Party.
However, on Nov. 22, 2021, the White House announced that the president will renominate Powell for another four-year term as Fed chair, with Brainard being nominated to fill the open seat of vice chair. Both nominations are subject to confirmation by the U.S. Senate.
- Lael Brainard is a Fed governor who has been nominated by President Biden to fill the open seat of Fed vice chair.
- Her nomination is subject to confirmation by the U.S. Senate.
- She had been mentioned as a leading candidate to replace Jerome Powell as Fed chair.
- Brainard has held a variety of federal posts under Presidents Clinton and Obama.
- Prior to that, she was a consultant at McKinsey & Company and an economics professor at MIT Sloan.
Early Life and Education
The child of an American diplomat, Brainard grew up in East Germany and Poland during the Cold War. She received a BA with university honors from Wesleyan University in 1983. She received an MS and a PhD in economics in 1989 from Harvard University. She was awarded a National Science Foundation Fellowship and a White House Fellowship.
Prior to joining the FRB, Brainard was undersecretary of the U.S. Department of Treasury from 2010 to 2013 and counselor to the secretary of the Treasury in 2009. During this time, she also was the U.S. representative to the Group of 20 (G-20) Finance Deputies and the Group of Seven (G-7) Deputies, and she was a member of the Financial Stability Board. She received the Alexander Hamilton Award for her service.
G-7 vs. G-8
The Group of Seven (G-7) became the Group of Eight (G-8) in 1998, when Russia joined the United States, the United Kingdom, Germany, France, Japan, Italy, and Canada as a member of this association of leading developed nations. However, Russia was suspended in 2014 after annexing the Crimean peninsula from Ukraine, making the association effectively the G-7 once again.
From 2001 to 2008, Brainard was vice president and the founding director of the Global Economy and Development Program and held the Bernard L. Schwartz Chair at the Brookings Institution, where she built a new research program to address global economic challenges.
The Brookings Institution, founded in 1916, is a nonprofit public policy research organization, or "think tank," based in Washington, DC. It currently has over 300 scholars affiliated with it, and its research topics include, among others, foreign policy, economics, development, governance, and metropolitan policy. Brookings states that it engages in "open-minded inquiry" and that its scholars "represent diverse points of view."
While research by Brookings has received high marks for factual accuracy, the organization tilts slightly left in terms of policy advocacy and 96% of its own donations since 1990 have gone to Democratic candidates and causes. SourceWatch, itself a project of the left-leaning Center for Media and Democracy, says "the Brookings Institute is the principal Democratic Party think-tank...and it is a place where [Democratic] 'politicians in-waiting' can bide their time until the next election."
Brainard was the deputy national economic adviser and deputy assistant to President Bill Clinton. She also was President Clinton's personal representative to the G-8 and the G-7.
From 1990 to 1996, Brainard was assistant and associate professor of applied economics at the Sloan School of Management of the Massachusetts Institute of Technology (MIT). She has published numerous articles on a variety of economic topics and is the editor or co-editor of several books.
Prior to her teaching position at MIT Sloan, Brainard worked in management consulting at McKinsey & Company.
In 2019, Brainard was one of five recipients of the Centennial Medal awarded by the Graduate School of Arts and Sciences (GSAS) at Harvard University. The Centennial Medal is the highest honor bestowed by Harvard's GSAS, first awarded in 1989 to mark the 100th anniversary of the founding of GSAS.
The Bottom Line
If Lael Brainard is confirmed by the U.S. Senate as the Fed's vice chair, it remains to be seen how much additional influence on policy she may have as a result. Brainard is seen as being more dovish than Powell, less concerned about inflation and less likely to support an increase in interest rates. She also is expected to be tougher on bank regulation as well as likely to make climate change a major item on the Fed's agenda.