Biden picks Fed official to become National Economic Council director
WASHINGTON >> President Joe Biden has selected Lael Brainard, the vice chair of the Federal Reserve, to direct the National Economic Council, according to people familiar with the decision.
He is also expected to tap Jared Bernstein, a longtime member of his inner circle dating back to Biden's tenure as vice president, to be the next chair of the White House Council of Economic Advisers. Bernstein is currently a member of the council.
Brainard, whom Biden previously considered appointing as Treasury secretary and Fed chair, will replace Brian Deese, who is stepping down this month after two years as the president's top economic adviser. She joins Biden's economic team as his administration is shifting its focus from passing legislation to carrying out the multitrilliondollar economic agenda that Biden signed into law in his first two years in office.
The move adds another seasoned policy expert to Biden's close circle of aides, but it could create headaches for him at the Fed, including a potentially bitter fight in the Senate to confirm Brainard's replacement as vice chair. Bernstein, whose role requires Senate confirmation, would succeed Cecilia Rouse, the current chair, who is departing to return to her faculty position at Princeton University. Bernstein would almost certainly become the most outspoken supporter of labor unions to ever helm the council, and he would continue to serve as an economic sounding board for a president who relies on a small — and typically longserving — circle of aides for policy advice.
The move would also give
Biden a trusted spokesperson on economic issues as the president gears up for his expected announcement that he will seek another term in 2024, a campaign in which the economy will take center stage. Bernstein has long been a frequent liberal voice on cable news and other media outlets, including throughout his tenure in the Biden administration.
Brainard will immediately become a new public face for the president's efforts to sell Americans on the progress the economy has made on his watch, including record job growth, even as polls show voters remain anxious about the economy.
Brainard is seen as the most liberal top official at the central bank and a potential brake on the Fed's campaign to raise interest rates to tame inflation. Raising interest rates cools consumer and business demand, slowing the labor market in an effort to restrain rapid inflation. Brainard has at times been more focused on keeping the job market strong, a position that Wall Street typically calls dovish.
“I think this should cause you to upgrade your expectations for interest rates a little bit; Lael Brainard was on the dovish end of the spectrum, and very respected,” said Jason Furman, an economist at Harvard University and a former economic adviser during the Obama administration. “One potential voice for restraint is going to be absent.”
Brainard, 61, has been vice chair at the Fed since May and was a governor at the central bank's board in Washington starting in 2014. Before that, she was an official at the Treasury and worked in the Clinton White House.
Her supporters say that experience will help the president and his new chief of staff, Jeffrey Zients, as they ramp up for Biden's expected announcement that he will seek reelection in 2024.