By Steve Holland and Lindsay Dunsmuir
(Reuters) – U.S. President Joe Biden is expected to name Federal Reserve Vice Chair Lael Brainard as his top economic policy adviser as early as Tuesday, a source familiar with the matter said, as the 2024 elections approach.
Brainard’s pending switch from the independent central bank to a White House role comes as the Fed navigates extensive challenges of its own as it fights to bring down inflation, leaving an intellectual and political hole at a key moment.
Brainard, an experienced fiscal and monetary affairs official, would replace White House National Economic Council (NEC) Director Brian Deese, who has announced his resignation.
In addition, Biden confidant Jared Bernstein is expected to replace Cecilia Rouse as chair of the Council of Economic Advisers, the source said. Rouse has announced plans to depart.
The White House declined to comment. Bloomberg News first reported the changes.
Biden’s overhaul of his top economic team comes as the Fed is still trying to glide inflation down without causing a recession. By the Fed’s preferred measure, inflation is running more than twice its 2% target rate.
The next NEC director and CEA chair will help shape the Democratic Biden administration’s economic policy, from executive orders to congressional spending bills and raising the debt limit, in the face of a more hostile U.S. House of Representatives now controlled by the Republicans.
Brainard, a Harvard-educated Democrat, has been an economic heavyweight at the central bank, known for her meticulous and thorough preparation, and particular expertise on global economics. It likely means a key role remains unfilled for months at an especially tricky time for the central bank.
During almost a decade there, she extended her influence across both monetary policy and financial regulation as she combined her political savvy honed in previous White House and Treasury roles with economic heft.
While Biden decided in late 2021 to renominate Fed Chair Jerome Powell, a Republican, to the top position, it was twinned with the elevation of Brainard to the number two slot, ensuring a counterweight on monetary policy and regulation. Unlike Brainard, a PhD economist, Powell is an investment banker and lawyer by training.
A bane of Wall Street, Brainard has also pushed the Fed to take more actions on requiring banks to account for the risks of climate change and has been the most high-profile supporter of a central bank digital currency, both of which have pitted her against both Powell and other senior colleagues in scope and ambition.
(Reporting by Steve Holland and Lindsay Dunsmuir; Editing by Nick Macfie)
