Nov 22, 2021 - Politics & Policy

What to watch in the Fed's new era

President Biden with Jerome Powell and Lael Brainard at a press conference today. Photo: Jim Watson/AFP via Getty Images
President Biden with Jerome Powell and Lael Brainard at a press conference Monday. Photo: Jim Watson/AFP via Getty Images

There's a new era at the Fed: Jerome Powell will keep the top job, Lael Brainard will step up as No. 2 — with more fresh faces set to come.

Why it matters: Prices are rising at the fastest pace in 30 years with millions still out of work. What Biden's Fed picks do may be felt by everyday Americans.

Here's what to watch:

Inflation-jobs tango: Acting to tamp down inflation could test Powell and Brainard's top pursuit: a labor market so strong even marginalized workers reap the benefits.

Climate change: The Fed has stepped up considerations about the risks climate change poses to the economy — a charge largely led by Brainard.

  • Environmentalists see Powell as too slow to act on climate, but they're enthusiastic about Brainard's elevation, according to Axios Generate co-author Andrew Freedman.

Wall Street's rules: Some were loosened under the Fed's last bank cop. A nominee for that post (vacant since October), which helps shape policies for financial regulation, is weeks away.

  • Biden is facing pressure to put up someone who's tough on regulations. Brainard was not shy about wanting more requirements.
  • Taken together, it's a sign that top decision-makers will be tilted to a stronger hand.
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