Brainard Wins Enough Senate Votes To Be Fed's Vice Chair

Federal Reserve Governor Lael Brainard received enough votes in the U.S. Senate on Tuesday to win confirmation as the U.S. central bank's next vice chair, the first of U.S. President Joe Biden's four nominees to meet that hurdle.

The vote was still underway in the Senate Tuesday afternoon as several Republicans joined Democrats to meet the 51-vote minimum for confirmation. It came a week ahead of a key Fed meeting where she and colleagues are expected to ramp up their battle against decades-high inflation with a big interest-rate hike and a balance sheet reduction.

COVID-19 cases among Democrats in Congress however muddled the prospects of a second Fed nominee without similar bipartisan support, Michigan State University's Lisa Cook.

Republicans have refused to back her, and in a 100-member Senate evenly split between the two parties, her confirmation could require the participation of all 50 of Biden's Democrats.

But on Tuesday two Democratic senators, Chris Murphy of Connecticut and Ron Wyden of Oregon, reported they had tested positive, as did Vice President Kamala Harris, a Democrat who could cast a tie-breaking vote.

Their status means they cannot cast votes, and could put in jeopardy a Tuesday vote to move Cook's confirmation forward.

"We don't know for sure who's here and who's not here," Senate Banking Committee Chair Sherrod Brown said shortly before the Brainard vote. "We do know one thing and that is Republicans in my committee have a consistent record of voting against black women... they should be ashamed of themselves."

The Senate was also expected to schedule confirmation votes this week for Fed Chair Jerome Powell, renominated to his current position, and Davidson College dean of faculty Philip Jefferson, nominated to a vacant seat on the Board. Both were expected to win bipartisan support.

At its policy meeting next week the Fed is widely expected to deliver a half percentage point interest rate hike and announce the start of a reduction in its giant balance sheet.

Cook and Jefferson would likely join after that meeting, taking part in deliberations over what are expected to be interest-rate hikes at every subsequent Fed meeting this year and into at least the first part of next year.

Biden earlier this month said he would fill the Fed Board's seventh and final seat by nominating former Treasury official Michael Barr to be the Fed's vice chair of supervision.

Brown said Tuesday a hearing on Barr could take place next month.

"We will move as quickly as we get the paperwork," Brown said.

Barr's paperwork is expected to be submitted this week and it is hoped to have him confirmed in his role by end of May, a source familiar said earlier this week

Sarah Bloom Raskin, Biden's initial choice for that job, withdrew her name last month from consideration after Republicans on the Senate banking committee blocked a vote on her appointment and a key Senate Democrat signaled he would not support her.