Biden nominates Federal Reserve Chairman Jerome Powell for the 2nd term | MCU Times

Biden nominates Federal Reserve Chairman Jerome Powell for the 2nd term

President Joe Biden announced Monday that he will nominate Federal Reserve Chairman Jerome Powell for another four-year term amid new concerns about controlling inflation and took the opportunity to respond to those who have expressed opposition to Powell’s nomination.

“As President, Jay undertook a landmark review to strengthen the Federal Reserve’s mission to provide full employment, to make strong progress toward this goal now, and I believe Jay is the right person to see us through and end it. efforts, while addressing the threat of inflation and what it poses to our economies and families, “said Biden at an afternoon event at the White House with his nominees.

“Now, some will no doubt question why I’d nominate Jay when he was the choice of a Republican predecessor. ‘Why do I not choose a Democrat? Why do I not choose fresh blood or take the Fed in another direction?'” Biden said. .

“Right now, in this moment of both enormous potential and enormous uncertainty for our economy, we need stability and independence in the Federal Reserve. Jay has proven the independence that I value in the federal – in the federal chair. In the “Last administration, he stood up to unprecedented political interference and by doing so successfully maintained the integrity and credibility of this institution. That is just one of the many reasons why Jay has the support of the entire political spectrum,” he added. he before inviting Powell to speak.

Biden also said he would nominate Dr. Lael Brainard, a longtime Federal Reserve official and former Treasury Secretary, to serve as Vice Chairman of the Federal Reserve System Board.

“While there is still more to do, we have made remarkable progress over the last 10 months in getting Americans back to work and getting our economy back on track. That success is a testament to the economic agenda I have pursued, and the decisive action that the Federal Reserve has taken under President Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and set us on the path to recovery, “he said in an earlier statement.

The announcement follows recent questions about whether Biden would nominate Powell, a Republican who was nominated to chair the Federal Reserve in 2017 by then-President Donald Trump. Powell was first nominated to the Federal Reserve Board of Governors by then-President Barack Obama in 2011 before Trump elevated him to succeed Janet Yellen, who now serves as Biden’s finance minister.

“Basically, if we are to continue to build on this year’s economic success, we need stability and independence in the Federal Reserve – and I have full confidence after their trial in the last 20 months that President Powell and Dr. Brainard will provide the strong leadership our country needs, “he added in the statement.

Powell and Brainard both made brief remarks in the White House, promising to work on behalf of all Americans to increase the resilience of the economy.

“We understand that our decisions matter to American families and communities,” Powell said of their work in the Federal Reserve. “I strongly share this sense of mission and am committed to making these decisions with objectivity and with integrity based on the best available evidence in the long-standing tradition of monetary policy independence.”

As the president faced increasing political pressure in recent weeks to shake up leadership by nominating Brainard to replace Powell, he spoke with both Powell and Brainard about his decision on Friday, according to a source familiar with the matter.

“Your record gives me serious concerns. Time and time again, you have acted to make our banking system less secure, and that makes you a dangerous man to head the Fed, and that’s why I will oppose your renunciation.” said Warren in a hearing on Sept. 28. She said Monday she will oppose Powell’s nomination.

Biden and his team had also been in regular and close consultation with Sen. Sherrod Brown, D-Ohio, who chairs the Senate Banking Committee, according to the source. Brown said Monday he would support Powell’s nomination.

Despite Brainard winning over progressives like Warren, who say she’s tougher on bank regulation and climate change, Biden appears to be sending a message confirming the central bank’s independence from politics, by keeping Powell in place.

“Overall, with Mr Powell’s remaining chairman, communication will remain clear and transparent, and policy will not stray too far from the current dove,” said Rubeela Farooqi, chief economist in the United States at High Frequency Economics, an economic research consulting firm. a statement to ABC News.

The nomination comes at a critical time for the central bank, which has a mandate to curb inflation and maintain job growth. Powell has tipped the “dove” on inflation in recent months, insisting that inflation will slow down as the pandemic subsides and the supply chain loosens.

Powell oversaw a busy time in the Federal Reserve as it pumped unprecedented stimulus into the financial system in response to the pandemic and is now beginning to phase out some of that stimulus. Wall Street had relied on his nomination as a way to maintain the continuity of politics at a tumultuous time in the economy.

If both are confirmed by the Senate, the White House will still have more seats to fill in the Federal Reserve Board, including the senior banking supervisor, allowing Biden to reshape the central bank in a more drastic way with these elections.

Economists told ABC News they expect a quick confirmation in the Senate for the nominees.

“We believe Biden paired the announcement of the more Democratic-oriented candidate Lael Brainard with the Republican-oriented Jerome Powell to dampen objections from the progressive members of the Democratic Party,” said Kathy Bostjancic, Oxford Economics Chief US Financial Economist .

Although at least three Democrats have signaled their opposition to Powell’s nomination, at least five Republicans have expressed support – so it looks like he will be confirmed, but not without more Republicans supporting Biden’s nominees. There were nine Democrats, including the then Sen. Kamala Harris, who opposed Powell’s nomination in 2018 when he was confirmed by the Senate by a vote of 84-13.

An aide to GOP leader Sen. Mitch McConnell confirmed that the minority leader is also expected to support Powell’s nomination. Others are likely to follow suit.

Republicans seek to label Powell as a source of necessary stability for an economy plagued by inflation and supply chain challenges, something they have repeatedly accused Democrats of.

“In light of an economy hampered by COVID-19, and now supply chain problems and rising inflation thanks to the Biden administration’s disabling policy, the Federal Reserve needs consistency,” RN.D. Sen. Kevin Cramer said in a statement. “Powell’s appointment is a sign of consistency, which is so important at a time like this. Stability and consistency are in the best interests of the US economy, and I look forward to supporting his confirmation.”

ABC News’ Allison Pecorin contributed to this report.

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