Jerome Powell will get the nod for a second term heading the Federal Reserve, according to the White House.
“Today, President Biden announced his intent to nominate Jerome Powell for a second term as Chair of the Board of Governors of the Federal Reserve System,” the White House said in a statement released Monday.
President Biden had been under pressure from the leftwing of his party to bring in a new Fed chair. Senator Elizabeth Warren (D-MA) said she opposed Powell getting a second term on the grounds that she believes he is too lax when it comes to banking regulation. Others have centered their criticism of Powell around the issue of climate change, demanding the Fed use its bank supervision authorities to cajole companies out of fossil fuel use, for example.
In recent months, Fed governor Lael Brainard emerged as a top contender for the job. Sen. Warren, for example, praised her work on banking regulation at the Fed. On Monday, the White House said Biden would name her Vice-Chair of the Fed’s Board of Governors, the central bank’s second highest ranking position.
Despite the criticism from the left, Powell is expected to easily win confirmation in the Senate, where 68 of the 84 lawmakers who voted in his favor four years ago are still sitting lawmakers.
“If we want to continue to build on the economic success of this year, we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” Biden said in a statement.
The decision to nominate Powell to a second term likely reflects some concern on the part of the White House over high and rising inflation. Powell has largely escaped blame for inflation despite holding a position whose duties include maintaining price stability. Nominating someone seen as more dovish on inflation might have been interpreted as a signal that the White House was willing to accept even higher and longer-lasting inflation.