Lael Brainard is the new director of the president's National Economic Council
EYDER PERALTA, HOST:
There's a new key player on the White House economic team, and she's a familiar face. Lael Brainard, who has been vice chair at the Federal Reserve, started a new job this past week as director of the president's National Economic Council. She'll coordinate the different Cabinet departments and other economic arms of the government. And she's taking over at an uncertain moment for the economy. The job market is still very strong, while economic growth has been slowing and inflation remains stubbornly high. NPR's Scott Horsley joins us now to talk about what Brainard brings to the White House and what she leaves behind at the Fed. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Eyder. Good to be with you.
PERALTA: So Brainard already knows her way around the White House. Tell us about her background.
HORSLEY: She is a Harvard-trained economist who served in both the Clinton and Obama administrations. She's worked in the Treasury Department. She knows both domestic and international economics. She's been on the Federal Reserve Board for almost a decade now. She was initially appointed there by former President Obama and then elevated to the vice chair's post by President Biden. She had also been considered for the Fed chairman's job and for the job of Treasury secretary in the Biden administration. In a statement, the president called Brainard a trusted veteran who understands how the economy affects everyday people.
PERALTA: Does her move to the White House signal some kind of shakeup in policy?
HORSLEY: No, I don't think so. I think we're going to see a lot of continuity with her predecessor, Brian Deese, who's held the job for the last couple of years. You know, this is the point in an administration when you usually see some turnover. People are worn out after a couple of years in the fishbowl. And it's also a chance for them to go out and make some money in the private sector. So I don't think this is a signal of abrupt change. Obviously, we have a divided Congress now, so there's not going to be a lot of opportunity for ambitious economic legislation. Instead, Brainard's job is mostly going to be implementing the bills that were already passed and then putting out whatever economic fires pop up.
A potential economic fire on the horizon, of course, is the battle over the debt ceiling. Congress needs to raise the government's borrowing limit or risk a potentially disastrous default sometime this summer or early fall. The National Economic Council director is usually a fairly low-profile job, but by virtue of her background, Brainard might be in front of the cameras a little bit more often, serving as an economic spokesperson for the White House.
PERALTA: So when he makes this move, the president has filled one vacancy and created another. What does Brainard's departure mean for the Fed?
HORSLEY: She has been an important and influential player at the central bank as it wrestled first with the economic collapse caused by the pandemic and then more recently with stubbornly high inflation. There has not been a lot of disagreement among Fed officials about the urgent need to get a handle on inflation. The Fed's moved aggressively to raise interest rates, and Brainard's been part of that consensus.
However, she has also been a strong voice for workers, and she's shined a spotlight on corporate profits. Speaking at the University of Chicago last month, she noted that workers' share of the economy has gone down in the last couple of years, while corporate profits have held steady at near-record highs. She suggested those corporate profits could come down in a way that eases inflation without having to suffer a big jump in unemployment. And that's an important perspective that sort of sets her apart from some of the other policymakers on the Fed's governing board.
PERALTA: Do we know who's going to replace her?
HORSLEY: We don't know. A couple of names have been floated, a couple of academic economists - Janice Eberly and Dynan. Eberly is at Northwestern University. Dynan is at Harvard. They have both worked in the Treasury Department in the past, and they both reportedly have strong backing from Treasury Secretary Janet Yellen, who, of course, used to be leader of the central bank.
PERALTA: NPR's Scott Horsley. Scott, thank you.
HORSLEY: You're welcome.
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