WASHINGTON — Treasury Under Secretary for International Affairs Lael Brainard will be leaving her job Friday, the department confirmed Tuesday, as the White House is believed to be preparing to nominate her to the Federal Reserve Board.
The confirmation by Treasury of a Wall Street Journal story came after the Sept. 9 reports she was considering moving to the central bank.
Brainard has studiously kept a low profile during her three and a half years in office as the top international policymaker under Tim Geithner and now Treasury Secretary Jack Lew.
At the Fed she could succeed Elizabeth Duke or Sarah Bloom Raskin — who was nominated to become deputy Treasury secretary and has been making courtesy calls on Capitol Hill lawmakers prior to her confirmation hearing.
With Janet Yellen's confirmation hearing expected to be in less than two weeks, Brainard as a Fed governor could be in line to become the next vice chairman. Brainard's monetary policy views are still a mystery but her experience as the Treasury's international monitor could be just as useful at the Fed.
Brainard would not expected to have any more difficulty than Yellen getting confirmed, although several Republican senators have already or may still use Yellen as an opportunity to send their message of opposition to whatever is their anti-administration priority. Senate Majority Leader Harry Reid has the last word on "holds" placed on nominations but may not have to muscle them aside, having already made it clear he is intent on getting Yellen ready to replace Ben Bernanke at the end of January.
Brainard during Geithner's tenure became the highest ranking woman ever at Treasury and for Jack Lew has continued to be the administration's "sherpa" who does the ground work preparing the way for G-7 and G-20 meetings and managing the liaison function with the International Monetary Fund. A Treasury spokeswoman told MNI early Tuesday the Journal story about Brainard was correct.
As in her Treasury blog post leading up to a recent G-20 meeting, Brainard can be depended on to stick to the letter of well-worn talking points, never taking any newsmaking excursions into controversial areas. Brainard's Bush administration predecessor David McCormick, now co-president of Bridgewater Associates, also refrained from being a headliner.
While her name has never become a household word, 51-year old economist Brainard has been working her way up the ranks of Democratic policy wonkdom as a loyal and behind-the-scenes lieutenant since the Clinton administration — when she was deputy to National Economic Policy Director Gene Sperling, who went on to become President Barack Obama's NEC director.
As Treasury's top international expert, she worked with Larry Summers on an interagency basis when he was the chief economic policy coordinator in the White House for two years early in the Obama administration. As is characteristic of her background persona, there was never a hint of discord, either with Summers or any other policymaker. With Summers out of the Fed picture, her considerable past liaison work with Yellen has come into better focus.
To a large extent, Brainard's expertise as an economist focused on international affairs would be similar to that of Summers in the 1990s, who first was World Bank chief economist then filled Brainard's current job, top Treasury international policymaker before becoming Treasury Secretary. International affairs, once one of the areas of public policy most removed from the day-to-day concerns of the Fed, has become much more important in recent decades. The need for international regulatory harmonization has followed an intense period of collaboration across borders during the financial crisis and afterward.
Brainard's background includes academic work that places her well within the interest area of Yellen, a labor economist. While a professor at MIT's Sloan School of Management, Brainard published studies measuring structural and cyclical unemployment, and at McKinsey & Co., advised on microenterprise in West Africa.
Brainard received her masters and doctoral degrees from Harvard after graduating from Wesleyan University with a degree from the College of Social Studies. She is married to a former assistant secretary of state for East Asian and Pacific Affairs, Kurt Campbell. He is now Chairman and CEO of The Asia Group, providing strategic and investment advice to business and government, which he founded in February after leaving his four-year State Department tenure.
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