Via the WSJ (Hilsenrath a co author):<\/p>\n
Federal Reserve governor Lael Brainard thinks the reasons for going slow on further interest-rate increases are powerful.<\/p>\n
The 54-year-old economist is emerging as a significant influence at an uncertain time for monetary policy and market tumult, one whose arguments have traction with the Fed\u2019s leadership.<\/p>\n
\u201cRecent developments reinforce the case for watchful waiting,\u201d Ms. Brainard said Monday in response to questions from The Wall Street Journal.<\/p>\n
Stresses in emerging markets including China and slow growth in developed economies could spill over to the U.S., she said. \u201cThis translates into weaker exports, business investment, and manufacturing in the United States, slower progress on hitting the inflation target, and financial tightening through the exchange rate and rising risk spreads on financial assets.\u201d<\/p>\n
The Fed raised its benchmark rate from near zero in December and penciled in four more increases this year. Traders in futures markets now put a low probability on the central bank raising rates at all this year.
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Ms. Brainard\u2019s place as an ally of Fed Chairwoman Janet Yellen wasn\u2019t so clear in October, when she publicly challenged Ms. Yellen\u2019s assertion that U.S. inflation would rise as unemployment declines. The challenge undercut Ms. Yellen\u2019s argument for why interest rates should start rising.<\/p>\n
Since then, however, the two have been largely in sync. Ms. Brainard provides an important window into the Fed\u2019s thinking on the outlook for rates and the economy. She voted in December to raise interest rates. But she also serves as a counterweight at the Fed to policy \u201chawks\u201d who want to move rates up quickly.<\/p>\n
\u201cShe certainly is somebody I have come to pay a lot of attention to,\u201d said Lewis Alexander, chief U.S. economist for Nomura Securities. \u201cIt feels a bit to me like she is expressing ideas that perhaps other people on the board including potentially Yellen believe but don\u2019t feel quite able or willing to express quite so clearly.\u201d<\/p>\n
Mr. Alexander worked with Ms. Brainard at the Treasury Department from 2009 to 2011. She became Treasury undersecretary for international affairs. Some Obama administration insiders see her as a candidate for higher office if a Democrat wins the White House this year. She declined to comment on her ambitions.<\/p>\n
She is the newest member of the Fed\u2019s board of governors, having joined in mid-2014. She kept a low profile during her first 12 months on the job, giving just four speeches in a period when Vice Chairman Stanley Fischer, who joined the board within weeks of her, gave 10 and Ms. Yellen gave 11.<\/p>\n
Ms. Brainard grabbed attention in October by suddenly appearing to position herself against Ms. Yellen. At issue was a theory known as the Phillips curve, which underlies the models and thinking of many Fed officials, including Ms. Yellen, who placed heavy emphasis on the idea in a speech in September.<\/p>\n
\u201cThe traditional link between employment gains and stronger inflation is very weak in today\u2019s economy,\u201d Ms. Brainard said in response to Wall Street Journal questions.<\/p>\n
\u201cI don\u2019t think it served Janet Yellen well,\u201d former Dallas Fed President Richard Fisher said in an interview of Ms. Brainard\u2019s critique. \u201cIt\u2019s the only time I\u2019ve known her when she didn\u2019t appear to be a team player,\u201d he said of Ms. Brainard, with whom he worked in the Clinton administration.<\/p>\n
Washington-based Fed governors rarely speak out against the central bank\u2019s leader, even though regional Fed bank presidents often do.<\/p>\n
Over the following four months it became clearer that their views nevertheless overlap in important respects. When the Fed raised rates from near zero in December, its policy statement sounded a lot like the message Ms. Brainard had been delivering in the weeks leading up to the action: that increases in the central bank\u2019s benchmark rate should be \u201cgradual\u201d and \u201cactual and expected\u201d progress in raising inflation toward the Fed\u2019s 2% target should be carefully monitored.<\/p>\n
The wording suggested Ms. Yellen and Ms. Brainard agree more than their earlier public comments might have suggested, and that Ms. Brainard\u2019s views influence Ms. Yellen\u2019s thinking.<\/p>\n
Behind the scenes, she and Ms. Yellen are temperamentally and in many respects philosophically close.<\/p>\n
Ms. Brainard\u2019s office at the Fed\u2014decorated with a purple crayon stick-figure drawing by one of her three daughters\u2014is just down the hall from Ms. Yellen\u2019s. The two often meet at the elevator and chat, according to people who know them. Both are described by colleagues as disciplined and prepared, with a history of reading from detailed, prewritten notes at Fed policy meetings. Both see monetary policy as a powerful tool that can help the economy heal after recession, a view rejected by critics of central-bank activism.<\/p>\n
Their relationship dates back more than two decades. Both women held economic positions in the Clinton administration and were nominated to the Fed board by President Barack Obama.<\/p>\n
Before joining the Fed, Ms. Brainard was a chief economic negotiator for the U.S. Treasury in the Obama administration during Europe\u2019s sovereign-debt crisis and traveled at times with Ms. Yellen to international meetings. Ms. Brainard\u2019s role included pressing eurozone leaders to take more rapid action to stem their economic crises, at a moment when the currency bloc faced potential collapse.<\/p>\n
Former Treasury Secretary Timothy Geithner, her boss at the department, described her as \u201cvery tough, in the best way.\u201d<\/p>\n
Those on the other side of the negotiating table during the eurozone crisis described her as candid, self-assured and often demanding in advancing the U.S. agenda.<\/p>\n
She has described monetary policy as \u201ca powerful tool with broad reach, but also relatively blunt.\u201d<\/p>\n
People familiar with her work say she can be blunt, too. \u201cShe has the capacity for independent conviction, and the courage of her convictions,\u201d Mr. Geithner said, adding Ms. Brainard \u201ccan be forceful when she needs to be.\u201d<\/p>\n
Like Mr. Geithner, Ms. Brainard spent much of her childhood abroad. The daughter of a U.S. foreign-service officer, she grew up in Cold War Germany and Poland.<\/p>\n
One of only nine women to serve on the Fed\u2019s board in the central bank\u2019s history, she is married to another high-profile Washington figure, consultant and former Assistant Secretary of State Kurt Campbell. The family splits time between the capital and a Civil War-era farm in the Blue Ridge Mountains.<\/p>\n","protected":false},"excerpt":{"rendered":"
Via the WSJ (Hilsenrath a co author): Federal Reserve governor Lael Brainard thinks the reasons for going slow on further interest-rate increases are powerful. The 54-year-old economist is emerging as a significant influence at an uncertain time for monetary policy and market tumult, one whose arguments have traction with the Fed\u2019s leadership. \u201cRecent developments reinforce […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-24654","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9YXi-6pE","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=\/wp\/v2\/posts\/24654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24654"}],"version-history":[{"count":1,"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=\/wp\/v2\/posts\/24654\/revisions"}],"predecessor-version":[{"id":24655,"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=\/wp\/v2\/posts\/24654\/revisions\/24655"}],"wp:attachment":[{"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/acrossthecurve.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}