On Monday, speculation about a second term for Federal Reserve chairman Jerome Powell was laid to rest as President Joe Biden proposed his name as Chair. There has been speculation that Fed Governor Lael Brainard, a progressive favorite might get the top position. Dr. Brainard has been nominated for vice chair of the board of governors. Current vice chair Richard Clarida’s term expires on January 31, 2022.
In a statement, President Biden said that the nation needed to build back the economy in a better way and that he was “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.”
Treasury Secretary Janet Yellen, who was the Fed chair before Powell, also expressed her support for him, on Monday. She remarked that she was “pleased” that the nation’s economy would “continue to benefit from his stewardship.”
Powell has had a long career with the Federal Reserve of the U.S. as President Barack Obama had appointed him on the Fed Board of Governors and he assumed office in 2012. He was nominated to the Chair by a Republican president Trump but found disfavor within months of his appointment.
Powell has often cited the need to have a broad and inclusive rationale so that there could be economic and labor market gains. He maintained an accommodative economic policy as the pandemic fueled a recession. He received praise for handling the economic crisis that rose out of the pandemic.
Powell generally received a fair amount of bipartisan support. He has been popular with the Republicans for years, until recently. He fell out of favor due to rising inflation in the recent weeks. Some people now believe that he is not doing enough against curbing inflation.
Policy experts have lauded Biden’s choices. Powell and Brainard jointly working together might find the balance in policy making required by the Biden administration to reach the economic goals and priorities that they have set for the nation.