Jerome Powell Gets Second Shot at Fed Chair After Biden Nomination

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Jerome Powell and Lael Brainard are being nominated to a second term as chair and vice chair, respectively, of the Federal Reserve System by President Joe Biden, leaving some Democrats perplexed.

The two originally came into their current positions as nominees under former President Donald Trump, a point of friction for progressives, but a necessity according to Biden who is championing stability in the organization regulating the U.S. dollar.

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“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again,” Biden said in a statement Monday morning. “That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery.”

While Powell is noted for his aptitude in survival over the last decade’s polarized political climate, as well as being a steady hand during the pandemic, a number of progressives want to see a new leader at the central bank who is tougher on banks as well as climate change preparations.

The detractors include Senators Elizabeth Warren and Sherrod Brown. Warren said in a Sept. 28 hearing that she would stand against Powell’s nomination after the Federal Reserve loosened regulations on big banks in recent years, the Wall Street Journal reported.

The president, however, went a step further in praising the work of Powell and Brainard in managing inflation over the course of the pandemic, which spurred a number of multi-trillion-dollar stimulus packages.

Biden and Powell are on the same page, ideologically speaking, in terms of fighting the potential financial fallout from climate change, as well.

“As I’ve said before, we can’t just return to where we were before the pandemic. We need to build our economy back better, and I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before,” Biden said. “Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system.”

Powell, a Republican, took office as chair in 2018 for a four-year term set to expire in February, with his status as a member of the board meeting its end by 2028.

“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” Biden said.

Powell’s career in government has been supported by both Republican and Democratic presidents: He was assistant secretary and undersecretary of the Treasury under President George H.W. Bush, and was nominated by President Barack Obama to the Federal Reserve Board of Governors, where he remained until his 2018 confirmation.

Powell and Brainard, a Democrat, will need to be approved by members of the United States Senate before they can resume their roles in the next term.

In the meantime, news of the nomination boosted the stock market on Monday morning, with the Dow Jones Industrial Average, S&P 500 and Nasdaq all seeing gains. 

Mark Hallum can be reached at mhallum@commericalobserver.com.