Explainer: Lael Brainard Departs Powell’s Team For A Key Role In Biden’s Team

Fed Vice Chair Lael Brainard’s departure to the White House stimulated speculation over who will replace her as all policymakers weigh how much further to raise interest rates.

Fed watchers wasted no time in coming up with some names of their own after Brainard’s name surfaced last month as a major nominee for the key administration job.

Brainard, who served as undersecretary of the Treasury for international affairs under former President Obama before joining the Fed, will bring a PhD and a deep understanding of the domestic and global economy into White House’s inner circle.

Brainard’s departure from the Fed will require Biden to find a replacement who can win Senate confirmation, giving Republicans an opportunity to litigate Biden’s response to inflation and his broader economic policies.

Along with Jeff Zients, the newly installed chief of staff, Brainard is expected to play a key role in negotiating with congressional Republicans on how to raise the debt ceiling. Brainard will also work closely with Treasury Secretary Janet Yellen, with whom she also served on the Fed, as well as the Council of Economic Advisers in the Clinton administration.

Biden picked Yellen over Brainard for the top Treasury job at the beginning of his term and then in 2021 came close to nominating her to chair the Fed. While he decided to renominate Jay Powell, he was impressed with Brainard in their one-and-one interview.

Brainard’s husband, Kurt Campbell, serves as Biden’s so-called Asia Czar on the National Security Council, a highly influential role where he coordinates policies across the U.S. government, as well as the international date line.

As NEC director, Brainard will carry the title of “Assistant to the President,” one rung higher than her husband, who is a “Deputy Assistant to the President.” Biden plans to make the formal announcement as soon as Tuesday, according to Bloomberg.

Biden has used the NEC to help generate new economic ideas, answer any detailed questions from Congress and broadly help sell the president’s agenda.

The director is expected to head to the cameras to defend the president’s policies and work with lawmakers to advance legislation. In the event of a potential recession, the NEC will take center stage on devising policies to help spur growth.