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Lyell Brainard, the second-in-command of the Federal Reserve, is in the running to become the next top White House economist, which would be a major shock for the US central bank as it grapples with the worst of its inflation problem. over the decades.

The Biden administration is considering Brainard, who served as deputy assistant secretary for international affairs at the Treasury Department under the Obama administration, to replace Brian Dees as the next head of the National Economic Council, according to people familiar with the matter.

Deese has held the post since 2021 and helped guide the White House’s economic policy through the successive shocks of Covid-19 and subsequent inflation. While Deese was expected to leave the White House, there is no set date for her departure.

Besides Brainard, there are other contenders for the job, and Biden has not made a final decision on the position, people familiar with the matter said. Also discussed are Gene Sperling and Bharat Ramamurthy, current White House economic officials, as well as Sylvia Matthews Burwell, former White House budget director and president of American University.

Brainard’s consideration for the role was first reported by the Washington Post.

If elected, his departure would leave a top leadership position vacant at the Fed as it tries harder to raise its policy rate after its most aggressive campaign since the early 1980s. Having raised the federal funds rate by more than 4 percentage points since March, through a 0.75 percentage point hike, officials are set to return to a more usual quarter-point hike at their upcoming policy meeting next week.

Brainard, a Democrat who has been at the Fed for nearly a decade, has long been one of the most hawkish voices on the Federal Open Market Committee, advocating a prudent approach to monetary tightening and taking into account potential economic and financial risks. with rapidly rising borrowing costs.

He has also pushed for tighter regulation of the country’s largest banks, as well as for the central bank to more directly include climate-related risks in its supervisory responsibilities; positions that won him praise from the progressive wing of the Democratic Party.

Before running for vice chairman in November 2021, Brainard was also considered a leading contender for the top job at the Fed, and before that, Treasury secretary.

If Brainard replaces Dees, the Biden administration would have to nominate another vice president, already dramatically reshaping the central bank’s top ranks. In addition to appointing Jay Powell as president, the White House promoted economists Lisa Cook and Philip Jefferson to governors and Michael Barr to vice president for oversight.

Biden’s original pick for the oversight role, Sarah Bloom Ruskin, was blocked by lawmakers who pushed back on his calls for regulators to be more proactive about climate-related financial risks.

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