Biden reportedly interviewed Brainard for Fed chairmanship

Federal Reserve Governor Lael Brainard was interviewed for the top job at the U.S. central bank when she visited the White House last week, according to people familiar with the discussions, noting that Fed Chairman Jerome Powell was faces a strong rival as President Joe Biden decides who will run the Fed for the next four years.

Powell and Brainard are the only people who have come forward publicly as candidates for the Fed chairmanship. Powell’s current term in that position ends in February and Biden said on November 2 that he would make a decision “fairly quickly”.

Bloomberg News previously reported that Brainard was also under consideration for the position of vice president of oversight at the Fed.

Both the White House and the Fed declined to comment.

Biden’s scope to reshape the Fed’s leadership was broadened even further on Monday when Governor Randal Quarles announced that he would step down before the end of the year. Quarles’ term as vice president of oversight expired in October, but he could have stayed as governor until 2032, and his departure gives Biden another position to fill.

In addition to the Quarles vacancy, Vice President Richard Clarida’s term of governor expires at the end of January and there is a vacant seat on the seven-seat board.

A large majority of economists polled by Bloomberg News expect Biden to re-nominate Powell.

But the White House has raised with some members of the Senate Banking Committee the possibility that Powell will not be reelected, according to two people familiar with the matter.

Considering Brainard for the presidency could mean that Biden’s team is weighing how a break with Powell could help advance its goals for the central bank.

Brainard and Powell work closely on various issues and are seen to have similar views on monetary policy, but she favors a tougher stance on big banks.

If he elected Brainard, Biden would be nominating someone who would excite Democrats in Congress, but would make Republicans and big banks nervous, sparking a tougher confirmation battle in the Senate, where Democrats only they have 50 out of 100 seats. Still, Vice President Kamala Harris could cast a tiebreaker vote.

Appointed by President Barack Obama in 2014, Brainard is currently the only Democrat on the Fed’s Board and, as governor, leads some of the most critical initiatives of the monetary authority.

He oversees the surveillance of financial stability at the Fed and payments, an area in which the central bank is now innovating with the development of an instant transaction system and the consideration of a digital currency.

With a Ph.D. from Harvard University and having spent part of her career at the Treasury, Brainard is seen as a highly competent and experienced macroeconomist. She also co-authored new text on the Fed’s long-term strategy that redefined the full employment mandate into a broad and inclusive goal.