Biden to call Fed’s Lael Brainard as top economic advisor, source says

U.S. President Joe Biden is anticipated to call Federal Reserve Vice Chair Lael Brainard to the White House’s top economic policy position as early as Tuesday, a source accustomed to the matter said on Monday.

Brainard would replace White House National Economic Council (NEC) Director Brian Deese, who has announced his resignation.

As well as, Biden confidant Jared Bernstein is anticipated to exchange Cecilia Rouse as chair of the Council of Economic Advisers, the source said. Rouse has announced plans to depart.

The White House declined to comment.

Bloomberg News first reported the changes.

Markets’ response was muted in Asia hours, with bonds and the dollar regular together with U.S. futures, and analysts said the implications of the appointment weren’t very clear.

“We do not know what to infer from this,” said Vishnu Varathan, head of economics at Mizuho Bank in Singapore.

“Under normal circumstances I’d have thought that her advice to Biden could be very pro stimulus,” he said.

“(But) the inflation backdrop will probably dampen if not check a few of her underlying tendencies … I believe that lots of her input could also be on the availability side.”

Biden is making over his top economic team because the Fed continues to hike rates of interest however the U.S. labor market stays tight, raising the prospect of an unusual recession without significant job losses.

The subsequent NEC director and CEA chair will help shape the Democratic Biden administration’s economic policy, from executive orders to congressional spending bills and raising the debt limit, within the face of a more hostile U.S. House of Representatives, now controlled by Republicans.

Brainard is a Harvard-educated Democrat who has been on the Fed for nearly a decade and served as Treasury’s top international affairs expert under President Barack Obama. She was an economic adviser to then-President Bill Clinton.