https://www.theepochtimes.com/fed-is-focused-on-fighting-inflation-lael-brainard-at-senate-confirmation-hearing_4213755.html

Federal Reserve governor Lael Brainard has confirmed to Congress that fighting inflation was the organization’s “most important task,” marking a pivot from last year when she didn’t want the central bank to cut down on stimulus plans.

Brainard, 59, was the top contender for the position of Fed Chair, but President Biden renominated Jerome Powell, and gave Brainard a higher position within the organization, which requires additional Senate approval. As part of the Senate confirmation hearing Thursday, she was questioned on inflation, independence of the Federal Reserve, and climate change among other topics.

“We are seeing the strongest rebound in growth and decline in unemployment of any recovery in the past five decades,” Brainard said. “But inflation is too high, and working people around the country are concerned about how far their paychecks will go.”

Brainard, a Democrat, is expected to get support from fellow Democrats in the Senate Banking Committee, but it remains to be seen how many from across the aisle will pledge support for a vocal advocate of progressive policies.

If the Senate confirms her position, Brainard enters the fray during a difficult time for the country, and a complicated situation for the Fed. According to government data, December marked the seventh straight month of above five percent inflation as consumer prices increased at their fastest pace in 39 years.

The Consumer Price Index rose 7.0 percent in the 12 months through December. The disposable income of Americans has been cut short by inflation rising at a faster rate than earnings. Fed officials, who maintained that the phenomenon was “transitory,” have changed their stance in recent days and said that interest rates would be hiked as early as March, which Brainard confirmed at the hearing.

“Our monetary policy is focused on getting inflation back down to 2 percent while sustaining a recovery that includes everyone,” she said.

The rise in prices has also been attributed to supply chain disruptions affecting global logistics. A sudden spike in demand, especially during the holiday season, stretched the shipping companies who were impacted by COVID-restrictions in countries like China, as well as domestic transportation, which was affected by staff shortages due to a surge in Omicron and federal vaccine mandates.

Factories could not get materials delivered on time and backlogs increased, while shelves emptied in retail stores as people stocked up to avoid a shortage.

“We have a set of tools. They’re very effective, and we will use them to bring inflation back down,” Brainard said. “Sector to sector, there are microeconomic issues—market structure, supply chain disruptions—at work. That’s not where our tools are effective.”

When questioned by Republican senators regarding climate change and how the Fed aims to regulate banks based on related risks, Brainard replied that the Fed’s focus is not on whom the banks lend funds to. But the Fed will assist in managing vulnerabilities in case there is an adverse effect on the climate.

“Not only does the Fed lack expertise in environmental matters, but there is no reason to believe that global warming poses a systemic risk to the financial system,” Sen. Patrick J. Toomey (R-Pa.) said Thursday.

Brainard worked as undersecretary for international affairs at the treasury department before joining the central bank, and handled global economic and financial policy during the Obama administration.

If confirmed by the Senate, Brainard would succeed Richard Clarida who will resign on Friday following disclosures of questionable stock trading carried out at the start of the pandemic.

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Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.

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