Joe Biden nominates Jay Powell for re-election as Fed chairman

Joe Biden nominated Jay Powell In his second term as chairman of the Federal Reserve, he chose to maintain continuity at the delicate moment of the U.S. economy because it is struggling to cope with persistently high inflation and an incomplete labor market recovery.

Lyle BrainardConsidered to be Powell’s fiercest contender for the top position, he was appointed as the vice chairman, which is currently held by Richard Clarida.

Biden said that Powell and Brainard helped “guide us through the worst recession in modern American history and put us on the road to recovery.”

He added: “I believe that Chairman Powell and Dr. Brainard’s focus on maintaining low inflation, stabilizing prices and achieving full employment will make our economy stronger than ever.

“They are as convinced as I am that urgent action is needed to deal with the economic risks brought about by climate change and to stay ahead of the new risks in our financial system.”

Biden has not appointed anyone to the few vacant positions on the Fed’s board of directors, including the supervisory vice chairman responsible for bank supervision. The White House stated: “The President intends to make these appointments starting in early December and is committed to improving the diversity of the board of directors.”

While the Biden administration is actively discussing how to fine-tune monetary policy in the face of supply disruptions and rising inflationary pressures, the decision puts an end to months of speculation about whether the Biden administration is willing to reshape the Fed.

Earlier this month, the Fed started Finish Its monthly asset purchase plan of 120 billion US dollars intends to completely end the stimulus plan next summer.

But recently inflation Data shows that US consumer price growth last month increased at the fastest rate in about 30 years, increasing the prospect that the Fed will have to abandon its patient monetary policy approach accelerate The “cutting” of the bond purchase plan, followed by rapid interest rate hikes in the next year.

Powell, 68, was promoted to Chairman of the Federal Reserve by Donald Trump in 2017 after becoming governor in 2012 and served as a senior Treasury official in the George HW Bush administration. He is considered the least controversial candidate for Biden, and Powell’s broad bipartisan support may simplify his confirmation process in the Senate.

Powell’s supporters also said that in a period of such obvious economic uncertainty, changes in leadership may cause unnecessary market volatility.

Powell took the lead in taking strong measures against the pandemic. Powell won praise for preventing more extreme market panics and guiding the U.S. economy through one of the worst contractions in history.

While insisting on Republican Powell, Biden ignored Criticism of progressives The incumbent’s regulatory record has led to the dilution of the post-crisis rules of what they believe is the largest financial institution.

Senator Elizabeth Warren, a left-wing Democratic Party from Massachusetts, even called Powell a “dangerous man” in September.

Brainard opposed the relaxation of the capital and liquidity requirements for Bank of America during Powell’s tenure and the revision of the Volcker rule guidelines on proprietary trading.

Biden’s choice adhered to the rarely-broken tradition of reappointing the current Fed chairman to the post during the president’s first term-a recognition of the continuity of policymaking and the independence of the central bank.

Barack Obama reappointed Ben Bernanke as chairman of the Federal Reserve in 2009, and Bill Clinton did the same with Alan Greenspan in 1996. But Donald Trump broke the routine when he chose Powell four years ago instead of giving Janet Yellen a second term.

Source link