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FreedomWorks economist Stephen Moore argued Monday, after President Biden announced he would nominate Jerome Powell for a second term as chairman of the Federal Reserve, that Lyle Brainard, the only Democrat on the Fed’s board of governors, “is a Disaster would have happened” in the role.

“He [Brainard] wanted to make climate change and gender equality issues a mandate at the Fed,” Moore told “Warney & Company” on Monday.

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“The Fed must have a mandate and that is to keep prices stable.”

The S&P 500 and the Nasdaq Composite hit new all-time highs on Monday as investors welcomed the re-nomination of President Biden, Powell’s, for a second term. The Dow Jones is also up about 0.7 percent.

anchorthe protectionThe lastChangeChange %
Me: DJIdow jones average35842.96+240.98+0.68%
SP500S&P 5004740.39+42.43+0.90%
me: compNASDAQ Composite Index16174.058135+116.62+0.73%
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“I’m with the market,” Moore told host Stuart Varney shortly after the announcement. “I think it’s a wise decision by the Biden White House.”

“Markets don’t trust Democrats for money and I think there’s a huge sigh of relief here,” he said.

Biden’s move indicates that he believes the war-tested central bank chief, who navigated the US economy through the depths of the worst recession in nearly a century, is among the most high-stakes jobs in the world. For one is the best person.

The announcement ends months of speculation about whether Biden will stick with former President Trump-nominated Republican Powell in 2017 or attempt to reshape the central bank by tapping Brainard. Only one Democrat has been elected to the top office in more than three decades.

Brainard is instead elected as the vice chairman of the Board of Governors; She will succeed Richard Clarida, whose term ends on January 31, 2022. The nominations now head to the Senate for confirmation.

Powell and Brainard are remarkably aligned on monetary policy and have both argued that the recent increase in inflation – a 6.2% increase in prices over the previous year, the government recently reported – is easing supply chains. likely to end up as pandemic-induced disruptions. But Brainard, unlike Powell, has been a vocal advocate for tighter regulation of banks and has disagreed on 23 Fed board votes since Powell became chairman in 2018, garnering his approval from Democratic lawmakers.

Biden’s decision is set to anger some progressive lawmakers, who urged Biden to replace Powell with a candidate who focused more on mitigating climate change risks and who supported stricter bank regulation. used to do. Under Powell, the Fed eased some rules on big banks, including making it easier for them to conduct riskier trades and tests that test whether they can weather another major economic downturn.

Biden Taps Jerome Powell for Second Term as Fed Chair, Turning Down Progressives

Although Moore believes Biden made the right decision by nominating Powell, he admitted on Monday that he is “not a huge fan.”

“I give him [Powell] About a C grade in terms of taking over the Fed’s presidency,” he told Varney.

“I think Powell was too tight-lipped when he should have pumped more money into the economy around 2017, but he is much more modest now,” he said, insisting that Brainard would have been a “disaster”.

Fed to reduce bond purchases by $15BA a month until it breaks out of pandemic-era policy

Although he was nominated by a Republican president, Powell has been closely aligned with Biden and Democrats to hold back until the labor market reaches pre-pandemic levels and all Americans benefit from the recovery. pledged to keep the Fed’s foot on the gas until In March 2020, the Fed slashed interest rates to nearly zero and launched a massive bond-buying program, bringing the central bank’s balance sheet to an astonishing $8 trillion.

Policymakers only this month began to withdraw support for the economy, announcing in early November that they would slash $120 billion in Treasury bonds and $15 billion a month in mortgage-backed security purchases.

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Powell has given no indication that higher inflation will prompt him or other Fed officials to raise interest rates from their rock-bottom levels, staying firm on his stance that these developments are not a reason to accelerate the central bank’s plans. He suggested the Fed wait until the tapering off of bond purchases ends and until officials determine that the labor market has fully recovered.

Granthshala Business’ Megan Heaney, Edward Lawrence and Lucas Manfredi contributed to this report.