US President Joe Biden’s decision for the next Federal Reserve chairman will be a choice between granting a new term to Jerome Powell, who enjoys broad support in the markets and among Democratic and Democratic lawmakers. Republicans, or replace him with one of his reputable colleagues.
Powell, whose term ends in February, is seen by some inside and outside the government as the favorite to stay in office. But if Biden decides he prefers his own choice over the name selected by former President Donald Trump, Fed director Lael Brainard is the most likely candidate for the nomination.
Administration officials said Biden will consult with his top economic advisers, including Treasury Secretary Janet Yellen, Council of Economic Advisers Chair Cecilia Rouse, and National Economic Council Director Brian Deese, to discuss the next choice. White House Chief of Staff Ron Klain will likely play a leading role in overseeing the search.
Some Democrats want Biden to replace Powell. They prefer the White House to appoint a woman or a member of a minority to head the central bank as part of a broader drive for diversity at the top levels of the US government. Critics believe the Powell Fed has been too weak on banking regulation and want the BC to play a more prominent role in addressing the risks of climate change.
Powell, a lawyer with a career in finance, was appointed to a seat on the Fed’s board of governors by then-President Barack Obama in 2012 before Trump appointed him to a four-year term as Fed chairman starting in 2018. His prospects of winning a second term seemed murky after suffering fulminating attacks from Trump during the first two years of his term.
But his position has strengthened in recent months as both party officials and economists praised his track record. There are also fears that a change in Fed leadership will increase risks in a thorny economic environment.
Republicans on the House Financial Services Committee, who often opposed Powell’s predecessors, gave him an unqualified endorsement last week. “You deserved and deserve another term as chairman of the Federal Reserve,” said North Carolina Rep. Patrick McHenry, the committee’s top Republican, at the start of two days of hearings last week.
More than three out of four economists interviewed this month by The Wall Street Journal expect Powell to receive a second term, and 86 percent of respondents believe Powell deserved it. Source: Dow Jones Newswires.
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