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November 24, 2021

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Biden keeps Powell on as head of Fed

Jerome Powell is the “right person” to lead the Federal Reserve and fight the record spike in US inflation, President Joe Biden said on Monday as he made his long-awaited pick for chair of the world’s most influential central bank.

The nomination, expected to win confirmation by the Senate, ends weeks of speculation over whether Biden would appoint the Republican chair to a second term or heed calls from left-wing members of his Democratic Party to replace him with another candidate, such as Fed Governor Lael Brainard.

Instead, Brainard will serve as vice chair, Biden said.

Powell will remain in the Fed’s driver’s seat, presiding over the rollback of its pandemic stimulus and the likely beginning of interest rate hikes next year.

Speaking alongside Powell and Brainard at a White House event, Biden credited the Fed chair with helping spur the economy’s faster-than-expected recovery from last year’s collapse, pointing to the progress made towards restoring the more than 20 million jobs COVID-19 destroyed.

“I believe Jay is the right person to see us through and finish that effort while also addressing the threat of inflation and what it poses to our economies and families,” Biden said, referring to Powell by his nickname.

Powell has led the central bank’s response to the massive pandemic downturn, which saw it slash its lending rate to zero and roll out trillions of dollars in liquidity.

The bank has pulled back those measures as the economy has recovered, but inflation has also spiked, fueling a drop in Biden’s approval ratings.


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