By Jason Lange
WASHINGTON Nov 4 Lael Brainard, a top economic
diplomat at the U.S. Treasury, will step down from her post on
Friday, a Treasury official said, amid reports she is under
consideration for a seat on the Federal Reserve Board.
As undersecretary of the Treasury for international affairs
since 2010, Brainard has played a key role in pushing China
toward a flexible currency and pressing Europe to tackle its
debt crisis more aggressively.
The Washington Post and the Wall Street Journal have
reported that Brainard is under consideration to fill a vacancy
at the Fed. The Treasury official, who spoke on Monday on
condition of anonymity, did not disclose the reason for the
departure and a White House spokeswoman declined to comment.
Brainard cut her policymaking teeth during the Clinton
administration, working alongside many officials who later ended
up serving under President Barack Obama, including top White
House economic adviser Gene Sperling and Treasury Secretary Jack
Brainard, who has a doctorate in economics from Harvard
University, served as deputy director of Clinton's National
Economic Council, where she focused on international trade and
financial policy. She was also the U.S. representative to the
meetings of the Group of Eight industrialized nations.
The Senate took more than a year to confirm Brainard for her
current post, slowed by a committee probe into her personal
In recent months, she has been seen as a steady hand on
international economics for Lew, who became the top Treasury
official in February and who had focused mainly on budget issues
during his long career in government.
Obama is likely to need to fill several seats on the Fed's
seven-person board in the coming months. Fed Governor Elizabeth
Duke stepped down in August; Fed Chairman Ben Bernanke is
expected to give up his board seat when his term as chairman
expires at the end of January; and Obama has nominated Fed
Governor Sarah Raskin for a top Treasury post.
In addition, Fed Governor Jerome Powell's term expires in
January, although Obama is expected to renominate him.
If nominated to the Fed, Brainard, 51, would bring a
familiarity with top economic officials around the globe.
She accompanied Lew on his first two foreign trips, to
Beijing and to Europe, and represented him at several
international gatherings, including the Group of 20 meetings in
St. Petersburg in September.
Before joining the Obama administration, Brainard worked as
a senior fellow at the Brookings Institution, where she helped
found the think-tank's global economy and development program.
In her academic work, she has focused on financial policy
and trade issues, and she advised the Obama campaign on trade
policy in 2008. While at Brookings, she also wrote about
development, foreign aid and climate change.
She is not an expert on monetary policy, though she has
published articles about financial regulation and labor markets.
Eswar Prasad, a trade and international economy professor
whom Brainard hired at Brookings, said her international
credibility and focus on labor markets and distributional issues
would bring a new perspective to the Fed.
"It would go beyond the traditional focus on issues such as
growth, stability and unemployment, to thinking more about
distributional issues, (and) about what happens to different
sectors and industries as a consequence of monetary policy,"
He also said Brainard's international experience could help
the Fed to more clearly communicate its policy message to a
Brainard has written several articles about the effects of
globalization and offshore production on domestic employment.
She has also looked at the debate over structural versus
cyclical unemployment - an issue front-and-center in current Fed
policy discussions as officials try to gauge how many people who
have dropped out of the labor force are likely to return.
In testimony to Congress in 2007, she argued that the United
States should pass permanent wage insurance to lessen the impact
of globalization on American workers.
She was previously a professor of applied economics at MIT's
Sloan School of Management, teaching graduate business courses
on international trade and financial policy. She also worked at
the consulting firm McKinsey and on microfinance in West Africa.