Biden to keep Jerome Powell as Federal Reserve chairman
Mr. Powell, who appeared alongside the president and Ms. Brainard at the White House, acknowledged the issues. “We know that high inflation is wreaking havoc on families, especially those who are less able to meet the higher costs of basic necessities like food, shelter and transport,” he said. he said, adding that the Fed “would use our tools both to support the economy and a strong labor market and to prevent higher inflation from taking hold.
Mr Powell’s reappointment suggests that the White House, which has a chance of completely reshaping the Fed, is not aiming to completely reshape the institution. The Biden administration already has a vacant gubernatorial post to fill, and two more seats will be opened early next year, giving Mr Biden the opportunity to appoint at least three of the seven governors. The president must also fulfill several leadership roles, including that of the Fed’s vice president for oversight, a powerful position given his influence over banking supervision.
Mr Biden came under pressure from progressives and moderate Democrats to choose a diverse roster of leaders for the Fed who would prioritize strict banking regulations and do what they could to deal with climate change risks in the financial system.
Mr Powell has been criticized for his slowness in tackling climate change and for his support for measures that have eroded some post-crisis financial rules. In his statement on Monday, Mr Biden said he expected Mr Powell, as well as Ms Brainard, “to tackle the economic risks posed by climate change and stay ahead of emerging risks in our financial system “.
It remains to be seen whether that will be enough to appease Mr Powell’s criticism. The Fed chairman’s tenure has been criticized by some progressives, including Senator Elizabeth Warren of Massachusetts, who called Mr. Powell a “dangerous man.” On Friday, Senator Sheldon Whitehouse of Rhode Island and Senator Jeff Merkley of Oregon released a statement opposing Mr. Powell’s reappointment.
In a statement on Monday, Mr Whitehouse said he was “disappointed” with Mr Biden’s decision, saying Mr Powell had not taken climate change seriously enough.
“I sincerely hope that, if confirmed, Powell will reassess his past opposition to using the Fed’s regulatory tools to minimize climate-related risks to the financial sector,” he said.