President Biden’s choice for second-in-command in central bank appears in Senate confirmation hearing
His remarks Thursday morning at a confirmation hearing before the Senate Banking Committee are the latest indication of how the central bank has taken a firm stand on fighting inflation. Fed officials have indicated in recent days that they may raise interest rates at their meeting in mid-March.
Ms. Brainard drew attention to the rapid decline in unemployment. “But inflation is very high, and working people across the country are worried about how far their salaries will go,” she said. “Our monetary policy is focused on bringing inflation back to 2%, while maintaining a recovery that includes all.”
Strong demand for goods and a shortage of intermediate goods such as semiconductors has pushed 12-month inflation to its highest reading in decades. Core consumer prices, which exclude volatile food and energy categories, were up 4.7% in November from a year earlier, well above the Fed’s 2% target, according to the Fed’s preferred gauge.
Ms Brainard said bottlenecks and other supply-related issues were contributing to the very high prices for some commodities, such as energy and food. But he said the Fed was prepared to raise rates to cool demand in the economy more broadly than necessary to reduce inflation.
“We have a set of tools. They are very effective. And we will use them to bring inflation back down,” Ms. Brainard said.
Ms. Brainard gained bipartisan support when she was confirmed to her current position at the Fed in 2014 and when she became the top Treasury Department official during the Obama administration in 2010. He also served as an advisor on international economics to President Bill Clinton.
Democrats control the Senate, with Vice President Kamala Harris able to break a 50-50 tie, and Ms Brainard hopes to win confirmation for her new position.
Ms Brainard, 59, has worked closely with Fed Chair Jerome Powell during her tenure leading the central bank. Last November, Mr Biden nominated Mr Powell to lead the Fed for another term when his current term ends next month. The president promoted Ms. Brainard to serve as second-in-command after being considered as a candidate to serve as Fed chairman.
If confirmed, Ms Brainard will replace Richard Clarida, who is set to step down on Friday.
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