An earlier version of this story incorrectly described how many Fed governors nominated by President Barack Obama remain on the Fed board. Fed Chairman Jerome Powell was appointed twice by Obama. Lael Brainard’s move from the No. 2 slot at the Federal Reserve, often called the world’s central bank, to become a senior White House staffer looks hard to explain on the surface but actually makes a lot of sense, according to Washington insiders.
“It may seem like a demotion for Brainard, but there’s a longer game for her,” analysts at Beacon Policy Advisors said in a note to clients. It is not easy to get into President Joe Biden’s inner circle, and her new role as head of the National Economic Council will help Brainard build a rapport with Biden, who previously passed her over for two bigger roles — Fed chair and Treasury secretary, Beacon noted. “Biden is notoriously a relationship-driven person. He doesn’t trust you just because you have a resume,” said Julia Coronado, president of MacroPolicy Perspectives and a former Fed staffer. Read more: Lael Brainard, Jared Bernstein named by Biden to top White House economics roles The knee-jerk reaction on Wall Street that the Fed will be somewhat more hawkish after Brainard departs is misplaced, analysts said. She was a “center-dovish” member of the central bank, said Krishna Guha, vice chair of Evercore ISI. Coronado said Brainard would not have left the Fed if it weren’t “packed with people” on the same ce …