White House officials have reached out to a key Democratic ally in the Senate to discuss filling the vacant role of Fed vice chair, with the Wall Street Journal reporting that Chicago Fed President Austan Goolsbee is under consideration for the post.
Senate Banking Chairman Sherrod Brown says he spoke Wednesday with White House officials about the vacancy created by President Joe Biden’s decision to name Vice Chair Lael Brainard to be his top economic adviser.
The Ohio Democrat would not disclose if any names were circulated, but said he wants a nominee who can focus on the Fed’s dual mandate of employment and wages. Fed Chair Jerome Powell, who has run afoul of some progressives, “favors a little more one part of the mandate than both,” Brown told Bloomberg News.
“I want somebody that’s going to be aggressive and work the inside of the Fed well in terms of wages and in terms of the dual mandate,” he added.
Naming Goolsbee, 53, to the board would mark an abrupt job change, after he assumed his role leading the regional Fed bank in Chicago last month. He previously was an economic adviser to President Barack Obama and a professor of economics at the University of Chicago Booth School of Business.
Goolsbee hasn’t spoken publicly on monetary policy since his start at the Chicago Fed, though Wall Street economists consider him to be a dove, like Brainard, who leans toward greater support of ensuring full employment. He supported the Federal Open Market Committee’s decision early this month to raise interest rates by a quarter point as policy makers continue to battle too-high inflation.
When asked about Goolsbee, a White House official said Biden will move quickly to nominate someone for Brainard’s seat, but would not discuss potential picks.
Senator Bob Menendez of New Jersey, a senior Democrat on the Banking Committee, said he hasn’t heard that Goolsbee is under consideration, but he prefers a Latino nominee and will be suggesting some names to the White House.
“He’ll always be the utility infielder, he comes up for everything,” he quipped about Goolsbee.
“I want to see a Latino on the Fed,” Menendez said. “In its 109-year history, we have not had anyone and we’ll be sending some names to the White House for their consideration.”
Biden’s orbit
Brainard’s ascension to director of the National Economic Council vaults her firmly into the close orbit of Biden’s most senior advisers, succeeding Brian Deese, who announced his departure earlier this month.
Brainard, 61, “brings an extraordinary depth of domestic and international economic expertise,” Biden said in a statement Tuesday. “She is a trusted veteran across our economic institutions, and understands how the economy affects everyday people.”
In a statement, the Fed said Brainard submitted her resignation Tuesday, and that it will be effective on or around Feb. 20.
Brainard — a one-time candidate for Fed chair and Treasury secretary — has been considered one of the central bank’s most dovish members. She has indicated the Fed may be able to hit its target of quashing inflation without widespread damage in the labor market, an outcome Biden has regularly expressed hope for publicly.
Brainard has been vice chair since May 2022, following a relatively smooth confirmation process and Senate vote that included support from seven Republicans.
Brown said that when the Banking Committee considers the nomination of Brainard’s successor, it also is likely to weigh a renomination of Lisa D. Cook, who was confirmed to the Fed in May to serve an unexpired term that ends next January.
“We’ve done that before, we’ve done two at once,” said Brown. “And I fully expect it to be Cook for the 14-year term.”
Cook’s confirmation came after stiff resistance from Senate Republicans. The Senate Banking Committee, which last year was split evenly between the two political parties, deadlocked on her confirmation. After Senate Majority Leader Chuck Schumer discharged the vote to the full Senate, she was confirmed on a 51-50 vote, with Vice President Kamala Harris breaking the tie.
If she were to face unified GOP opposition again, Democrats have an added Senate seat now and it could ease her approval.
Cook, who was an economist at Michigan State University, is the first Black woman to serve as a Fed governor.
