Ms. Brainard will also tell lawmakers that the Fed’s policies are “focused on getting inflation back down to 2 percent while sustaining a recovery that includes everyone,” calling that the central bank's “most important task.”
After nearly two years of propping up a virus-stricken economy by keeping interest rates at rock bottom and buying government-backed debt, Fed officials began to slow their large bond purchases late last year. That program is on track to end in March. Officials have signaled in recent weeks that they also expect to lift interest rates to make borrowing more expensive, slowing demand and helping to cool the economy.
Markets increasingly expect four rate increases in 2022, which would put the Fed’s short-term policy interest rate just above 1 percent.
“Today the economy is making welcome progress, but the pandemic continues to pose challenges,” Ms. Brainard will say. “Our priority is to protect the gains we have made and support a full recovery.”
Ms. Brainard has been at the Fed since 2014, spanning the Obama, Trump and Biden administrations. Before that, she was a top international official at the Treasury Department. An economist and a Democrat, she had been seen as a potential contender to be Treasury secretary or Fed chair during the Biden administration.