Lael Brainard: A rigorous economist enters Joe Biden’s White House

Lael Brainard likes to trace her rise to the top ranks of American economic policy through her childhood observations.

As the daughter of a US diplomat stationed in Poland and West Germany, Brainard created “mental checklists” of the contrasting fortunes of the communities around her in Cold War Europe. On one side of the Iron Curtain was the “grey wasteland of communist factories and ill-stocked shelves”; on the other hand, the “new cars and thriving small businesses” of the West.

“When I first started working, I compiled these checklists in Maggie Thatcher’s industrial cities, in auto assembly plants in Detroit, in financial crisis-hit Mexico City, in agricultural towns in Senegal,” she said during an inaugural address at the School of Advanced International Studies in Washington last May.

For the past eight years, Brainard has used these economic antennas in her job as a senior Federal Reserve official. But next week she will take it to the White House after Joe Biden made her his chief economic adviser and director of the National Economic Council.

Brainard enters the White House at a pivotal time in Biden’s presidency. Although much of its multi-trillion dollar economic agenda is now law, the focus will be on implementation. And some of the big challenges in managing the economy remain – from high inflation to the risk of a significant slowdown or even recession triggered by subsequent Federal Reserve rate hikes.

“[Biden] is looking for continuity, for someone who is fully committed to policy goals,” says a senior White House official. “The President has great confidence in her.”

Brainard was born in Hamburg 61 years ago. Her father Alfred was a US field service officer specializing in Eastern Europe. The Cold War period not only fostered an interest in economics, but also generated a certain patriotism in Brainard. “I think a lot of kids are told to watch their manners. In my house, that was always followed by the admonition, ‘Remember, you represent America,'” she told Congress in 2009.

Brainard received an American education: first at a private high school in Pennsylvania, then at Wesleyan University, where she received a bachelor’s degree in social sciences. Harvard University was her next stop, for both a master’s degree and a doctorate in economics.

There, in line at the cafeteria, she met her future husband, Kurt Campbell, who was a faculty member. They married in 1998.

For the third year in a row, both will serve in senior roles in a democratic government: Campbell is now coordinator for the Indo-Pacific on Biden’s National Security Council. They have three daughters. In her free time, Brainard enjoys watching them play soccer and other sports, according to people who know her well. She is also a fan of the English Premier League.

Brainard’s first big job in Washington followed a professorship at the Massachusetts Institute of Technology and came in the late years of the Bill Clinton administration, when she was brought to the White House by Laura Tyson, the only other female NEC director.

She was quickly pushed into negotiations on the emerging market debt crisis and also became an international summit Sherpa for Clinton. After the George W. Bush presidency, which Brainard spent building the global development program at the Brookings Institution think tank, she returned to government under Barack Obama as Undersecretary of the Treasury Department for International Affairs.

Those were the years of the financial crisis, the onset of heightened economic and strategic tensions with Beijing, and the eurozone debt crisis, meaning she frequently crossed the Atlantic with Treasury Secretary Tim Geithner.

“She had a great seat at the table,” says Daleep Singh, chief global economist at PGIM, who worked with Brainard at Treasury and worked in Biden’s NSC.

At work, Brainard is known to be rigorous and demanding – and a role model for many. “She’s extremely polished, very deep into the substance and reality of the situation,” says a former colleague. “She has a great way of explaining concepts in a non-shaky way,” adds Heidi Crebo-Rediker, a former chief economist at the State Department during the Obama administration.

In 2014, Obama nominated her for the Fed. There she emerged as one of the more thoughtful monetary policy doves, took a tough stance on capital standards for banks, opened up the Fed to digital currencies and climate risk, and was key in launching the emergency lending facilities that helped the US avoid a financial crisis at the start of the Pandemic.

During her time at the Fed, she came close to becoming Treasury Secretary twice: as the front-runner in 2016, Hillary Clinton had won the White House. She was a contender again in 2020 but lost to Janet Yellen after Biden won the presidency.

In 2021, Biden interviewed Brainard for the job of Fed chair: although he ended up extending Jay Powell’s term instead, he offered her the position of vice chair. Apparently, she has continued to impress the President ever since. “She won’t have a steep learning curve; she’s been to the White House before,” says Crebo-Rediker. “Your politics and your intellect will tower above everyone there.”

james.politi@ft.com