Lael Brainard, President Biden’s nominee to serve as vice chair of the Federal Reserve, pledged in written remarks Thursday to make combating inflation the central bank’s top priority.
Brainard, a current member of the Fed’s board of governors, outlined the stance in prepared remarks released ahead of her confirmation hearing with the Senate Banking Committee.
“Inflation is too high, and working people around the country are concerned about how far their paychecks will go,” Brainard said. “Our monetary policy is focused on getting inflation back down to 2 percent while sustaining a recovery that includes everyone. This is our most important task.”
Inflation hit 7% in December, reaching its highest level since 1982, according to the latest Consumer Price Index data released by the Bureau of Labor Statistics. Americans are paying steeper prices for everyday staples such as groceries and gas amid supply chain disruptions and other pandemic-related complications.
Despite the inflation crisis, Brainard said the US economy is “seeing the strongest rebound in growth” in five decades as it recovers from the COVID-19 pandemic. She noted improving labor conditions and recent declines in the unemployment rate.
“I am committed to pursuing the Federal Reserve’s congressionally mandated goals of price stability and maximum employment and to maintaining the strength and resilience of our financial system,” Brainard said. “I am committed to the independent and nonpartisan status of the Federal Reserve.”
Brainard will address the Senate panel just days after Fed chair Jerome Powell participated in his own renomination hearing. Powell is seeking a second four-year term as the central bank’s top official.
Senators from both parties pressed Powell to detail the Fed’s plan to combat inflation. Powell acknowledged inflation was a “severe threat” to the employment market.
“If we see inflation persisting at high levels longer than expected, if we have to raise interest rates more over time, we will,” Powell said. “We will use our tools to get inflation back.”
The Fed is expected to raise interest rates at least three times and dial back pandemic-era economic support this year as part of its efforts to address the situation.
As vice chair, Brainard would play a key role in shaping US economic policy. She was considered a frontrunner for nomination as Fed chair, but Biden ultimately selected Powell for another term.
Some Republicans have indicated they are wary of Brainard’s nomination to a prominent Fed role, citing her support for Fed action to address climate change. GOP lawmakers say any climate-related action would exceed the Fed’s mandate.
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