The Atlanta Journal-Constitution
What a Biden presidency means to Federal Reserve
Don’t expect current monetary policy to change — at least not soon.
A victory for Joe Biden in the U.S. presidential election may eventually reshape the Federal Reserve’s leadership and the way it regulates big banks, but it won’t change what matters most for financial markets and the economy: monetary policy.
With the economy struggling to regain its pre- pandemic-strength, Fed officials have telegraphed clearly that interest rates will stay near zero for at least three more years.
Moreover, in August the Fed’s rate- setting panel unanimously endorsed a new long- run strategy that promises to keep rates lower coming out of this recession than officials had dared during previous recoveries.
That strategy won’t change. On Thursday, Fed officials voted once again to hold rates at rock- bottom levels for the foreseeable future as risks to the economy remain elevated.
A divided Congress through at least the end of this year means Chairman Jerome Powell will keep calling on lawmakers to reach a deal on more fiscal support, especially for those out of work. He sounded hopeful during the press conference on the prospects for more aid, noting that “plenty of people on Capitol Hill” see the need for more action.
Biden can remake the Fed’s leadership by 2022. By then, Powell’s term — as well as the terms of both vice chairs — will expire.
Powell’s fate under Biden is difficult to predict. In a recent survey of economists, 57% said they expected a President Biden would offer him another fouryear term. Powell hasn’t said whether he would accept another term if asked to stay.
But the new president could comeunder pressure from some in his party to pick a Democrat, especially from Democrats displeased by the Fed’s steady push to soften some of the regulatory reforms introduced following the
coal deposits, have even more reasons than others to seek nuclear options. Being subject to stringent European Union emissions standards also creates additional incentives.
The recent change in regulation is allowing the U. S. to compete for a larger share of the market, whose value it estimates at $ 500 billion to $ 740 billion over the next 10 years.
Barriers to expansion remain formidable. Westinghouse, whichwas one of the leading nuclear industry suppliers in the U.S ., went bankrupt in 2017 as it faced billions in potential liabilities related to domestic projects in Georgia and South Carolina. After the South Carolina project was canceled in 2017, the two at Southern Co.’ s Plant Vogtle remained the only reactors under construction in the world using Westinghouse’ s flagship AP1000 technology, though that is also behind schedule and over budget.
Russia doesn’t see current U.S. nuclear deals in Europe as a threat to its flagship Rosatom Corp. because the U.S. companies don’t have the bandwidth to build new plants now, a government official close to Russia’s nuclear industry said. The U. S. projects in Europe will likely be limited to servicing agreements, the official added, asking for anonymity as they are not authorized to speak publicly.