Controlling inflation, which has hit a nearly 40-year high, is the “most important task” the Federal Reserve must tackle to keep the current economic expansion going, Fed Director Lael Brainard told a US Senate panel. this Thursday (13) at a hearing on his nomination to become vice-chair of the US central bank.
“We’re seeing the strongest pick-up in growth and decline in unemployment of any recovery in the last five decades,” Brainard told members of the Senate Banking Committee.
“But inflation is very high and workers across the country are worried about how long their paychecks will last. Our monetary policy is focused on reducing inflation to 2% while sustaining an all-inclusive recovery. This is our most important task.”
The session with Brainard, who has a doctorate in economics and is a veteran of US economic policymaking, could mark the start of a broader and potentially bitter partisan dispute over the composition of the Fed’s board, with Republican senators quickly signaling their concerns about your appointment.
Only four of those seats are currently filled, and Biden’s pending nominations — including one for the post of second vice chair for financial regulation oversight — could further what he and his Democratic supporters think should be a bigger role for the Fed. on climate issues and a firmer hand with Wall Street.
Brainard, a Democrat first named to the Fed in 2014 by then-President Barack Obama and confirmed at the time by 61 votes to 31, would be a prominent figure in that effort.
She was a frequent dissenting vote against measures taken during the administration of former President Donald Trump and under Fed Chair Jerome Powell to loosen supervision of the biggest banks.
She advocated for the Fed to require financial firms to set aside more capital and expressed concern that Fed officials might lag behind European peers in understanding how climate change could affect the macroeconomy and the financial system.
Senator Sherrod Brown, the committee’s Democratic chairman, opened the hearing with a notable endorsement, calling Brainard a “steady hand” who has helped lead the Fed during the coronavirus pandemic and “someone who understands that workers, not corporations, not Wall. Street” are at the heart of the US economy.
But the panel’s top Republican, Senator Pat Toomey, sharply criticized Brainard’s “advocacy” of a new approach to Fed monetary policy that he said risks “an inflationary tax on all Americans” to promote employment growth for different demographic groups.
Toomey said he was also concerned that Brainard “has advocated for the Fed to shape environmental policy” by incorporating climate analysis into its oversight of financial institutions.
A majority vote in the Senate, where Democrats exercise close control, is needed to confirm Brainard for the vice-chair’s post.
Brainard’s opening remarks came close to the monetary policy roadmap used by Powell in his hearing on Tuesday, when he said the Fed will act as necessary with higher interest rates and other measures to ensure inflation continues. return from the current high level to the 2% target.
Reference: CNN Brasil
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