Bloomberg Talks Lael Brainard Talks Fed Independence
Aug 26, 2025
Lael Brainard, former Vice Chair of the Federal Reserve, shares insights from her decade-long experience at the Fed. She highlights concerns over political pressures jeopardizing its independence, particularly regarding recent controversies surrounding board member Lisa Cook. Brainard emphasizes the potential negative impacts on the economy if such actions persist. She also discusses the Fed's balancing act between inflation and employment, and the crucial need for diverse perspectives in monetary policy to ensure economic stability.
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Attack On Fed Independence Raises Risks
- Lael Brainard says the White House action is an unprecedented attack on Fed independence and could raise inflation and long-term rates.
- She warns political pressure on governors undermines credibility and is bad for the economy.
Insist On Due Process First
- Lael Brainard urges that due process and a real investigation must occur before any removal or punishment of a governor.
- She says the White House preempted that process and cautions against hasty actions without facts and legal defense.
Preemptive Moves To Shift Fed Majority
- Brainard frames the move as an attempt to overturn the board majority well before terms expire by threatening firings without cause.
- She highlights that monetary policy could be overshadowed by fears of political interference even when policy aligns with presidential desires.