The past week began with the widely expected official announcement that Fed Vice Chair Lael Brainard will leave the Board to become President Biden’s director of the National Economic Council. In this position, she will be playing a key role in developing the Administration’s future economic policy.
The departure of the Vice Chair leaves an important opening at the central bank and jockeying for the position has already begun. Several Hispanic Members of Congress are suggesting that it is way past time that a Hispanic serve on the Federal Reserve Board. The timing of the replacement is uncertain, but the new Board member is unlikely to be nominated and confirmed prior to the next meeting on March 21/22.
Next Wednesday, the Fed releases the minutes from their February meeting. The minutes will shed some light into the thinking of the FOMC and to what extent there may be some dovish members who may want to pause before more rate increases.
Munich Security Conference
With tensions running high in Europe over the war in Ukraine, and Chinese/US relations strained by the spy balloon, world leaders will meet this weekend at the annual Munich Security Conference.
This past week the U.S. State Department confirmed that Secretary of State Blinken will attend, and there are reports he might meet with his Chinese counterpart, Wang Yi. The Administration is walking a fine line between being tough on security with the takedown of the spy balloon but also making clear that they want to lower the temperature between the two superpowers.
The U.S. and European allies will have talks about the ongoing war in Ukraine. President Zelinsky addressed the conference remotely. Both Democratic Leader Chuck Schumer and Republican Leader Mitch McConnell are attending the meeting in a display of bipartisan support for the US effort to help Ukraine in the war with Russia. With some growing divisions in the Republican House the two leaders attending the Conference is an important signal of U.S. resolve.