Biden giving Powell 2nd term as Fed chief
WASHINGTON — President Joe Biden said Monday he is nominating Jerome Powell for a second four-year term as Federal Reserve chair, endorsing his stewardship of the economy through a brutal pandemic recession in which the Fed’s ultra-low rate policies helped bolster confidence and revitalize the job market.
Biden also said he would nominate as vice chair Lael Brainard, the lone Democrat on the Fed’s Board of Governors and the preferred alternative to Powell among many progressives.
His decision strikes a note of continuity and bipartisanship at a time when surging inflation is burdening households and raising risks to the economy’s recovery. In backing Powell, a Republican who was elevated to his post by President Donald Trump, Biden brushed aside complaints from progressives that the Fed has weakened bank regulation and has been slow to take account of climate change in its supervision of banks.
“When our country was hemorrhaging jobs last year, and there was panic in our financial markets, Jay’s steady and decisive leadership helped to stabilize markets and put our economy on track to a robust recovery,” Biden said, using Powell’s nickname.
A choppy day of trading on Wall Street saw stocks finish mostly lower. The market was higher for much of the day as traders were relieved to learn of Powell’s reappointment.
“Powell getting the nod is a sign that Biden is staying the course on monetary policy and the Fed is steadily moving toward normalizing policy,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.
For months, Powell was the favorite to be reappointed, but a vigorous campaign by environmental and public interest groups in support of Brainard clouded the picture in recent weeks. Critics argued Powell had loosened bank regulations and was insufficiently committed to using the Fed’s regulatory tools to combat global warming.
Biden sought to assuage those concerns. He said Powell had committed to making climate change “a top priority” and had agreed to make sure “that our financial regulations are staying ahead of emerging risks.” Powell’s renomination is widely expected to be approved by the Senate Banking Committee and then the full Senate.
The 68-year-old lawyer was nominated for the Fed’s Board of Governors in 2011 by President Barack Obama after a lucrative career in private equity and having served in a number of federal government roles.
Unlike his three immediate predecessors, Powell lacks a Ph.D. in economics. Yet, he has earned generally high marks for managing perhaps the most important financial position in the world.