Biden Reappoints Jerome Powell as Federal Reserve Chair

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US President Joe Biden on Monday reappointed Jerome Powell for a second term as chairman of the country’s central bank, the Federal Reserve, saying Powell has helped the United States through the worst economic downturn caused by the coronavirus. played an important role in helping him recover. global pandemic.

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Biden’s reappointment of 68-year-old Powell to one of the most important economic policy positions in the world ends weeks of speculation in financial markets and Washington political circles. Some progressive Democrats in Congress had pushed for Biden to nominate Fed Governor Lyle Brainard as head of the Fed, but the president nominated him as vice president instead.

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Biden’s decision to tap Powell, a Republican and former private equity executive, for another four-year term is a rare instance in which he renamed a key official appointed by his Republican predecessor, Donald Trump.

At the White House, Biden said he named a Republican rather than a Democrat because “we need stability and independence at the Fed.” He said Powell has “broad bipartisan support” in a politically divided country.

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The president called Powell “the right person to see us” as he recovers from the damage caused by the pandemic and the sharpest rise in US consumer prices in 31 years – a 6.2% annual jump in October.

Investors mostly welcomed the Powell reappointment, with two of the three major US stock indexes — the Dow Jones averaging 30 major stocks and the broader S&P 500 — rising sharply throughout trading Monday, though the technology-heavy Nasdaq index fell.

In a politically unstable Washington, Powell hopes to win Senate confirmation again. Of the 84 lawmakers who voted for him four years ago, 68 are still in office, split evenly between Democrats and Republicans.

A Powell opponent, Democratic Senator Elizabeth Warren of Massachusetts, said she would vote against his reappointment, supporting Brainard’s nomination. Warren cited Powell’s “failures on regulation, climate and ethics”.

Powell was first nominated to the Fed’s seven-member policy-making board a decade ago by then-President Barack Obama, another Democrat who was promoted to Fed chairman by Trump. Biden also has three other current or upcoming vacancies to fill on the Fed board, which largely sets economic policy for the US, the world’s largest economy.

FILE – Federal Reserve Board Governor Lyle Brainard speaks at Harvard University March 1, 2017 in Cambridge, Massachusetts.

Biden said the US had made “significant progress over the past 10 months in getting Americans back to work and getting our economy moving again,” and praised the work of Powell and Brainard. Under Powell, the Fed provided stimulus money to boost the recovery.

“As I’ve said before, we can’t return to where we were before the pandemic, we need to improve our economy, and I believe the focus of Chair Powell and Dr. Brainard is on keeping inflation down.” Stable, and providing full employment will make our economy stronger than ever before, Biden said in a statement.

“Together, they share my deep belief that urgent action is needed to address the economic risks posed by climate change and stay ahead of emerging risks in our financial system,” the president said.

“Fundamentally, if we are to continue to build on this year’s economic success, we need stability and independence at the Federal Reserve – and after their trial over the past 20 months I am confident that Chair Powell and Dr. Brainard will provide strong leadership to our country,” Biden said.

US Treasury Secretary Janet Yellen, herself a former Fed chair, praised Powell’s reappointment, as did many Republican senators.

“The stable leadership of Chair Powell and the Federal Reserve helped ensure that our economy is able to recover from a once-in-a-generation health and economic crisis,” Yellen said. “I am delighted that our economy will continue to benefit from his leadership, and from the expertise and experience of Lyle Brainard.”

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