The Senate voted on Tuesday to confirm Lael Brainard as the Federal Reserve’s vice chairwoman.
Brainard, a Democrat who up until now had served as a member of the Fed’s Board of Governors but not as its vice chairwoman, is well-liked on the Left and, prior to being nominated to the No. 2 role at the central bank, had been considered to lead the Fed. The vote to confirm her as vice chairwoman was 52-43.
Brainard faced a grilling by Republicans on the Banking Committee during her confirmation hearing. She was asked not only about how she thinks the Fed should handle soaring inflation but also about the intersection of the Fed and climate change.
During her testimony, she emphasized that while climate change is a broad risk that the Fed reviews, she does not advocate the central bank trying to influence what sectors banks lend money to.
SOARING INFLATION TAKES CENTER STAGE IN BIDEN FED NOMINEE CONFIRMATION HEARING
“We would not tell banks which sectors to lend to or which sectors to not lend to, but we do want to make sure that they are measuring, monitoring, and managing their material risks,” she said.
Brainard, who is Harvard-educated and once served in the Treasury Department, told lawmakers during her hearing that inflation is the biggest financial issue facing the U.S. right now. She also fielded questions about how the Fed got its inflation forecasts so wrong after months of telling the public that the higher prices were merely “transitory.”
“Inflation is too high, and working people around the country are concerned about how far their paychecks will go,” Brainard told lawmakers. “Our monetary policy is focused on getting inflation back down to 2% while sustaining a recovery that includes everyone. This is our most important task.”
The Senate could end up confirming other Fed nominees this week as well.
Biden renominated Fed Chairman Jerome Powell, a Republican, to lead the central bank for another term. Powell enjoys bipartisan support, and his nomination was voted out of committee by a 23-1 vote.
Still, despite his appeal to members of both parties, Powell has faced pushback from some Republicans who don’t think he and the Fed acted quickly enough in raising interest rates, something that they contend could result in a recession.
The Senate will also consider two academics for roles on the Fed’s Board of Governors. Lisa Cook of Michigan State University and Philip Jefferson of Davidson College were both nominated by Biden to fill open seats on the board.
Jefferson’s nomination was approved by the Banking Committee by a unanimous vote, and both parties spoke highly of him during his hearing. Cook, on the other hand, received a tied vote in the evenly divided Senate and might need Vice President Kamala Harris to serve as the tiebreaking vote should no Republicans support her nomination.
Republicans have already forced one of Biden’s Fed nominees to drop out of contention. Sarah Bloom Raskin, Biden’s choice for vice chairwoman for supervision, faced concerns that she supports the reallocation of capital away from companies that contribute to climate change.
She was also accused of lobbying the Fed to secure access to the central bank’s payments system, with some Republicans arguing that her work with a financial technology company after holding a previous Fed job raised concerns about the “revolving door” between private and public work.
Centrist Sen. Joe Manchin, a West Virginia Democrat, announced he would vote against Raskin’s nomination, all but sealing her fate.
The Fed nominations are seen as especially important this year as the country battles its worst plague of inflation since 1981. Consumer prices increased by 8.5% for the 12 months ending in March.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
The Fed has increased its interest rate target in order to drive down the high inflation, although the higher prices aren’t expected to tamp back down to reasonable levels anytime this year. The central bank is also eyeing more aggressive action at its meeting next week.
Most investors now foresee a half-point hike in May, with the likelihood of the more aggressive rate hike occurring pegged at nearly 100%, according to CME Group’s FedWatch tool, which calculates the probability using Fed fund futures contract prices.
