Two candidates have emerged as the potential next Federal Reserve vice chair, to fill the likely vacancy created with the upcoming departure of Lael Brainard.
- Northwestern University finance professor Janice Eberly and Harvard economist Karen Dynan are reportedly in consideration for the vice chair position, The Wall Street Journal reports.
- Both have worked as the assistant Treasury secretary for economic policy—a job similar to being the chief economist.
- Treasury Secretary Janet Yellen is reportedly familiar with and thinks positively of both candidates.
- The nominee would replace Lael Brainard, who is leaving the position to become the White House National Economic Council director.
- Chicago Fed President Austan Goolsbee may also be up for consideration, but he has faced resistance from some Democratic party members.
- The White House has not officially stated who the nominee will be.
Why it’s news
President Joe Biden faces a difficult nomination process as members of his party look for different qualities in a candidate. Goolsbee’s potential nomination has faced resistance from some party members who hope to see the president select a woman or person of color for the job.
Several lawmakers led by Senator Bob Menendez (D-NJ) asked President Biden to nominate a Latino American to the vice chair position. Goolsbee’s potential nomination also drew criticism from Republicans who say he is too partisan for the Fed.
While some lawmakers support increasing the diversity of the Fed board, others, like Senator Elizabeth Warren (D-MA), have asked the president to consider a candidate who will take a less aggressive approach to curb inflation. Senator Warren has been critical of Fed Chair Jerome Powell’s tactic of rapidly increasing interest rates.
Historically, the Fed vice chair has often helped shape the agenda for rate-setting meetings.
Backing up a bit
President Joe Biden has reportedly selected Federal Reserve Vice Chair Lael Brainard as his top economic adviser to lead the National Economic Council (NEC).
In addition to naming Brainard his economic adviser, Jared Bernstein will likely be named the new chair of the Council of Economic Advisers.
Brainard will replace National Economic Council Director Brian Deese. She will work alongside Treasury Secretary Janet Yellen to advise the president on how best to cut back inflation and implement economic policy.
Brainard’s new appointment will leave an opening at the central bank. Once nominated by the president, the new Fed vice chair must be confirmed by the Senate before joining the Federal Reserve as vice chair.