‘FED’ UP WITH HIKE$
Bank pick: Inflation is #1 enemy
Lael Brainard, President Biden’s nominee for vice chair of the Federal Reserve, pledged Thursday to make combating inflation the central bank’s top priority.
Brainard, a member of the Fed’s board of governors, outlined the stance during her confirmation hearing before members of the Senate Banking Committee.
“Inflation is too high, and working people around the country are concerned about how far their paychecks will go,” Brainard said. “Our monetary policy is focused on getting inflation back down to 2% while sustaining a recovery that includes everyone. This is our most important task.”
Consumer pain
Inflation hit 7% in December, reaching its highest level since 1982, according to the latest Consumer Price Index data released by the Bureau of Labor Statistics. Americans are paying steeper prices for everyday staples such as groceries and gas amid supply-chain disruptions and other pandemic-related complications.
Despite the inflation crisis, Brainard said the US economy is “seeing the strongest rebound in growth” in five decades as it recovers from the COVID-19 pandemic. She noted improving labor conditions and recent declines in the unemployment rate.
“I am committed to pursuing the Federal Reserve’s congressionally mandated goals of price stability and maximum employment and to maintaining the strength and resilience of our financial system,” Brainard said. “I am committed to the independent and nonpartisan status of the Federal Reserve.”
Brainard previously served as the Treasury Department’s undersecretary for international affairs. Her confirmation will require a majority vote from the Democrat-controlled Senate.
Senate Banking Committee Chair Sen. Sherrod Brown (D-Ohio) offered glowing praise in his opening remarks.
“With Governor Brainard as vice chair of the Fed, Americans will have someone who understands that workers — not corporations, not Wall Street — that workers create economic growth,” Brown said. He said her career demonstrates her “commitment to the success of all Americans from all walks of life.”
A different opinion
But Sen. Pat Toomey (R-Pa.), ranking member of the Senate Banking Committee, was critical.
He noted that Brainard was among the Fed officials who initially called surging inflation transitory.
He also called himself “particularly concerned” by her view that the Fed should tailor monetary policy to address climate change. “Not only does the Fed lack expertise in environmental matters, but there’s no reason to believe that global warming poses a systemic risk to the financial system,” Toomey said.
Brainard addressed the Senate panel days after Fed Chair Jerome Powell participated in his own renomination hearing as he seeks a second four-year term.
Senators from both parties pressed Powell to detail the Fed’s plan to combat inflation. Powell acknowledged inflation was a “severe threat.”
“If we see inflation persisting at high levels longer than expected, if we have to raise interest rates more over time, we will,” Powell said. “We will use our tools to get inflation back.”