Former National Economic Council Director Lael Brainard Talks Fed | Bloomberg Talks

📅 Jan 28, 2026 Bloomberg Podcasts 8 MIN 40 VIEWS 13 SEGMENTS · 4 SPEAKERS

Former National Economic Council Director Lael Brainard joined Bloomberg's Romaine Bostick and Katie Greifeld to talk the Fed decision and new potential fed chair. See omnystudio.com/listener (https://omnystudio.com/listener) for privacy information. Bloomberg Talks curates top interviews from around Bloomberg News. Hear conversations with the biggest names in finance, politics and entertainment. On Bloomberg Talks, we round up interviews with Fortune 500 CEOs, government officials, well-known investors and business leaders. Listen to more Bloomberg Talks: • Bloomberg Talks Subscribe...

Questions asked in this interview

0:44Do you agree with that characterization that this potentially is the most important legal case in the Fed's 113-year history?
2:43How much longer though do you think that the Fed can stay out of that political fray, especially as we approach May when the president will have his pick of who to nominate to the Federal Reserve?
5:56And you seem to suggest that those are to a certain degree or another incorporated into the Fed models. Are they?
7:28Lael, I have to ask you with all the things going on in Washington right now, do you have faith, conviction that this will remain an independent Fed?

Bloomberg Audio Studios 0:02 ↗

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Jerome Powell 0:07 ↗

Let me start with, I don't respond to comments by other officials, whoever they may be. It's just not appropriate to do that. I will tell you why I attended. I would say that that case is perhaps the most important legal case in the Fed's 113-year history. And as I thought about it, I thought it might be hard to explain why I didn't attend. In addition, Paul Volcker went to a Supreme Court case famously in, I guess, 1985 or so. So it's precedent and I thought it was an appropriate thing and I did it.

Host 0:44 ↗

That was Federal Reserve Chairman Jerome Powell answering questions today on why he attended the Supreme Court hearing regarding President Trump's attempt to dismiss Fed Governor Lisa Cook. As we also wait to hear who President Trump's next Fed chair pick will be, let's discuss all of this with Lael Brainard. She is distinguished fellow at the Georgetown Center for Financial Markets and Policy. She is also the former vice chair of the Federal Reserve and the former NEC director. It's fantastic to have you with us. There was a lot Jerome Powell did not address today. Nothing on the dollar, nothing on his plans as to whether he'll leave the Fed in May, and nothing really more on political pressure on the Fed on himself. But he did comment on that case against Lisa Cook, his decision to attend that hearing. Do you agree with that characterization that this potentially is the most important legal case in the Fed's 113-year history?

Lael Brainard 1:38 ↗

I do. I think that the Supreme Court case on whether the president can fire a sitting governor of the Federal Reserve Board without any due process and without showing a clear connection to their ability to undertake the responsibilities that they were confirmed by the Senate to do is extremely important for the independence of the Fed. And I think that the press conference, the statement today just really conveyed the message that the Federal Reserve is doing its job. It is staying out of the political fray. It is looking carefully at the data and making policy exactly on the lines that Congress told it to, which is to preserve a strong labor market, maximum employment, and to get inflation down to 2%. And I think that was the focus of the Federal Reserve chair today in the press conference. Didn't allow himself to get distracted, didn't really get pulled into the political fray.

Host 2:43 ↗

How much longer though do you think that the Fed can stay out of that political fray, especially as we approach May when the president will have his pick of who to nominate to the Federal Reserve? Of course, the chair is just one of many votes, but even still, you have to imagine that ideologically they will fall in line with the president's thinking on interest rates.

Lael Brainard 3:04 ↗

Well, certainly that is important to the president. He has said that many times that the chair that he selects needs to reflect his views. On the other hand, all of the candidates also will be looking carefully at the data. We heard a lot about the data today from Chair Powell. We saw that the statement reflected the fact that there's been an upgrade to the labor market. There's less concern now about unemployment. And so the new chair is going to have to get support from the remainder of the committee, that committee that's been in place for some time now, if he wants to take the committee in a very different direction. And he'll have to do it based on the dual mandate that was provided by Congress and based on the evolution of the outlook in the data.

7 more exchanges in this transcript

Cite this transcript

APA, MLA, BibTeX

APA

Brainard, L. (2026, January 28). Former National Economic Council Director Lael Brainard Talks Fed | Bloomberg Talks [Interview transcript]. Bloomberg Podcasts. CEOInterviews.AI. https://ceointerviews.ai/interview/669704/

MLA

Lael Brainard. "Former National Economic Council Director Lael Brainard Talks Fed | Bloomberg Talks." Bloomberg Podcasts, 28 Jan. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/669704/.

BibTeX

@misc{brainard2026_669704,
  author       = {Lael Brainard},
  title        = {Former National Economic Council Director Lael Brainard Talks Fed | Bloomberg Talks},
  howpublished = {Interview transcript, Bloomberg Podcasts. CEOInterviews.AI},
  year         = {2026},
  month        = {jan},
  url          = {https://ceointerviews.ai/interview/669704/},
  note         = {Speaker-attributed transcript with timestamps}
}

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Key Quotes (5)

“I think that the Supreme Court case on whether the president can fire a sitting governor of the Federal Reserve Board without any due process and without showing clear connection to their ability to undertake their responsibilities is extremely important for the independence of the Fed.”

▶ 1:38 CONTROVERSIAL POLICY

“The Federal Reserve is doing its job; it is staying out of the political fray, looking carefully at the data and making policy exactly on the lines that Congress told it to, which is to preserve a strong labor market, maximum employment, and to get inflation down to 2%.”

▶ 2:07 POLICY

“All of the candidates will be looking carefully at the data; the new chair is going to have to get support from the remainder of the committee if he wants to take the committee in a very different direction, and he'll have to do it based on the dual mandate and the evolution of the outlook in the data.”

▶ 3:04 POLICY

“We're seeing divergence with strong aggregate growth clearly being driven by the AI boom — data centers, semiconductors, AI infrastructure — while on the other hand the labor market is basically treading water with low hiring and low firing, and consumer sentiment is quite weak.”

▶ 4:35 POLICY

“Every policymaker on the FOMC uses a combination of the Fed's models and outside models, private sector forecasts and on‑the‑ground contacts; with AI potentially driving structural shifts they have to get data from businesses and workers to spot turning points that are hard to capture in models based on past relationships.”

▶ 6:27 POLICY

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Also at National Economic Council

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About Lael Brainard

In June 2026, Brainard commented on the Federal Reserve's first policy meeting under Chair Kevin Warsh. She noted that about half of the Federal Open Market Committee expected a rate hike that year, and observed that Warsh had indicated he was not a fan of the Fed providing forward guidance. Brainard pointed to task forces on data sources, the inflation framework, and productivity as potential avenues for Warsh to move the committee in a more dovish direction. She also said that AI was pulling forward demand for data center investment, creating a near-term inflationary impulse that was likely to lift core inflation in the latter half of the year. In April 2026, Brainard said that the war had "changed [the inflation outlook] dramatically," with gas and diesel price increases flowing through to food and other prices. She stated that the Fed had signaled an extended pause on rate cuts rather than further easing. Brainard said some policymakers had discussed the possibility of two-sided risks to interest rates and that policymakers would debate how tariff and oil price shocks could alter consumer expectations and keep inflation higher for longer. She also said she would be "quite cautious" about insisting on rate cuts given that core inflation was rising before the oil shock and was now facing additional pressure from the AI data boom.

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