Lael Brainard, a Federal Reserve governor named by President Biden as the new central bank vice-chairman, plans to tell lawmakers the central bank will use its policies to control inflation when she testifies during her investigation. hearing.
Ms. Brainard, who will be screened by the Senate Banking Committee on Thursday at 10 a.m., is likely to gain significant support among Democrats and may receive some Republican votes, although it’s unclear at this time how many.
Her appointment — and her new role at the Fed if the Senate confirms her — comes at an economically challenging time. While unemployment is falling rapidly, inflation has risen, with a report on Wednesday showing that a major price index rose in December at the fastest pace since 1982.
“We are seeing the strongest uptick in unemployment growth and decline of any recovery in the past five decades,” Ms Brainard will say, according to her prepared remarks. “But inflation is too high and working people across the country are worried about how far their paychecks will go.”
Ms. Brainard will also tell lawmakers that the Fed’s policy is “focused on bringing inflation down to 2 percent while supporting a recovery that includes everyone,” calling it the “central bank’s primary job.”
After nearly two years propelling a virus-ridden economy by keeping interest rates at lows and buying government-backed debt, Fed officials began slowing their major bond purchases late last year. That program ends in March. Officials have indicated in recent weeks that they also expect interest rates to be raised to make borrowing more expensive, slow demand and help cool the economy.
Markets increasingly expect four rate hikes in 2022, pushing the Fed’s short-term key rate just above 1 percent.
“Today, the economy is making welcome progress, but the pandemic continues to pose challenges,” said Ms Brainard. “Our priority is to protect the profits we’ve made and support a full recovery.”
Ms. Brainard has been with the Fed since 2014, spanning the Obama, Trump and Biden administrations. Before that, she was a top international official at the Ministry of Finance. An economist and Democrat, she was seen as a potential candidate to become Treasury Secretary or Fed Chair during the Biden administration.
She has a good working relationship with Fed chairman Jerome H. Powell, who has nominated Mr. Biden for a second term. She will use her prepared statement to emphasize that she has worked for many governments in Washington — Democrats and Republicans alike — while pledging the Fed’s mission to fight inflation and take its independence from partisan squabbles seriously.
“I will bring a considered and independent voice to our deliberations,” she will say.
