Nov 22, 2021, 1am
President Joe Biden nominated Federal Reserve Governor Lael Brainard to be the central bank's vice chair, a position that would allow him to oversee bank regulation and monetary policy.
Lael Brainard, the sole Democrat on the Fed's board of governors, became an early favorite to replace Powell.
2021.
After weeks of speculation, Biden announced his picks to lead the Federal Reserve Monday morning, selecting Brainard as vice chair and Powell as return chair for terms ending in early 2026.
Richard Clarida's first term on the Fed's seven-member board is set to end on January 31, and Brainard would succeed him.
The other two women to serve as Fed Vice Chair were the late Alice Rivlin, who served as vice chair from June 1996 and the late Treasury Secretary Janet Yellen, who was appointed by Obama.
As scrutiny over individual stock trades cast doubts on Clarida's potential reappointment, Brainard became many progressives' pick to head up the Fed thanks to her bold stance on climate change, especially compared to Powell, who this month said the Fed has only a "narrow mandate" on
Last month, Brainard outlined an early plan for stress tests for large financial institutions to assess their capital requirements.
Brainard said it will be important to begin systematically assessing financial institutions' resilience to climate-related risk scenarios, citing the record high cost of U.S. weather disasters over the last five years.
In recent months, Brainard emerged as a top contender for Fed Chair as progressive Democrats mounted an effort to oust Powell, who's repeatedly stated climate change is not a top priority for the Fed. Biden interviewed Powell and Brainard for the position, but for weeks he was indecisive. Whitehouse and Merkley urged him to pick a chair that believes fighting climate change is the responsibility of every policymaker.
The key background.
Brainard was the deputy national economic adviser to former President Bill Clinton. She became one of the Fed's most outspoken critics of wealth inequality because of her stance on climate change. In a recent email, Oanda analyst Craig Erlam noted that Brainard is more dovish than Powell and that she is willing to keep monetary policy accommodative in order to boost economic activity. "Ordinarily, that would make her the stock market's pick, but that may not necessarily be the case if investors view inflation as a greater risk than the central bank does," says Erlam.
Chief critic.
The top Republican on the Senate Banking Committee said earlier this month that he had a lot of concerns about Brainard being nominated to be chair. "That would be beyond the scope of the Federal Reserve's mission," wrote Toomey in a letter.
The Fed's Brainard has a plan for climate stress tests.
Fed Governor Lael Brainard calls for a new focus on digital dollars.
