No Brainard

13 September 2016 By Gina Chon Follow @GinaChon

Lael Brainard struck a dovish note on interest rates ahead of the central bank’s next meeting. She’s also a leading candidate to be Treasury secretary in a Clinton administration. Her soothing words could help mollify progressives suspicious of her past role in trade deals.

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Federal Reserve Governor Lael Brainard indicated she favors keeping interest rates steady during a speech on Sept. 12 at the Chicago Council on Global Affairs.

Brainard said there is a “new normal” that includes greater-than-anticipated slack in the labor market and limits in the effectiveness of monetary policy given near-zero interest rates.

“This asymmetry in risk management in today's new normal counsels prudence in the removal of policy accommodation,” she said. “I believe this approach has served us well in recent months, helping to support continued gains in employment and progress on inflation.”

The Federal Reserve’s next two-day meeting to consider interest rates starts on Sept. 20.

Brainard is seen as a possible Treasury secretary if Hillary Clinton wins the U.S. presidential race. Politico reported on Sept. 13 that some progressives would be opposed to her nomination.

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