President Biden said Tuesday he plans to announce a candidate for Federal Reserve Chair in “about four days”.
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Biden is considering whether to re-nominate the current chairman Jerome Powell, whose term of office officially ends in February. The Fed chair is one of the most powerful actors in Washington, with the ability to set the pace of economic growth and is usually nominated for a second term, often to strengthen the central bank’s independence from politics.
Powell, a former private equity manager and former Republican Treasury officer nominated by then-President Trump in 2017, received bipartisan support on Capitol Hill to steer the US through the coronavirus pandemic.
But Lael Brainard, the only Democrat to sit on the Fed’s Board of Governors, has also emerged as a potential candidate for the job.
Biden reportedly interviewed both Brainard and Powell at the White House a little over a week ago. The two candidates are closely aligned on monetary policy, and both have argued that a recent surge in inflation is likely to subside as the pandemic-induced disruptions in the supply chain subside.
“I’ve been thinking about it a lot,” Biden said last week as he addressed the United Nations Summit on Climate Change known as COP26 in Glasgow, Scotland. “I met [with] macroeconomic advisor on the best choice. We have many good options. But I’m not going to speculate now. “
Although Wall Street widely expects Biden Powell to run for a second term, matters have been complicated by progressive lawmakers who want the Fed’s chief to regulate banks and other financial institutions more tightly and prioritize climate change. Brainard is a vocal advocate of tighter regulation of banks and has opposed 23 Fed board votes since Powell became chairman in 2018.
At the same time, Powell has reportedly secured important confirmation from the Treasury Secretary Janet Yellen, the former Fed chief who has increased his chances of a second term as she has nearly two decades of experience at the Fed.
Yellen also worked directly with Powell, who served as Fed governor during her tenure. (In 2018, Powell replaced Yellen at the helm of the Fed, making her the first chairman not reappointed after an initial full term.)
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“I spoke to him about candidates and advised him to choose someone who is experienced and credible,” Yellen told CNBC last week. “I think Chair Powell certainly did a good job.”
The White House decision comes as Fed leaders grapple with the highest inflation in decades, which has lasted longer than the central bank expected.