President Joe Biden has ended weeks of speculation by choosing to appoint Federal Reserve Board (FRB) Chair Jerome Powell to another four-year term in that post. Meanwhile, Biden has also chosen Lael Brainard, who currently serves with Powell on the seven-member FRB, to become the next vice chair of that body, filling an open seat. The announcements came on Nov. 22, 2021, and both nominations are subject to confirmation by the U.S. Senate.
While a number of left-leaning constituencies, both within and outside the Democratic Party, have favored Brainard for the top slot at the Fed, she was likely to encounter serious opposition from Republicans in the Senate. By contrast, the renomination of Powell has elicited bipartisan support.
- President Biden has renominated Jerome Powell for another four-year term as Fed chair.
- The nomination must be confirmed by the U.S. Senate but should win widespread bipartisan support.
- Biden also has chosen Lael Brainard, another member of the Federal Reserve Board, to fill the vacant post of vice-chair.
- Brainard had been mentioned as a possible pick to replace Powell but was likely to have encountered opposition from Republicans.
Stakes for Biden
While hoping to avoid a potentially bruising confirmation fight in the Senate by reappointing Powell, Biden also probably was looking to reassure the markets by sticking with the known quantity. Powell has been generally liked and trusted by a broad spectrum of figures in the both the Republican and Democratic parties, and he has been widely praised for his policy initiatives in response to the COVID-19 pandemic.
Biden also is particularly concerned about rising inflation, which has been a negative for him in public opinion polls. "I'm confident that Chair Powell and Dr. Brainard's focus on keeping inflation low, prices stable and delivering full employment will make our economy stronger than ever before," Biden said in a statement regarding the nominations.
Brainard had been favored for Fed chair by constituencies on the political left that want stricter financial regulation from the Fed as well as a greater focus on addressing climate change. In this regard, Biden's statement also indicated that he expects both Powell and Brainard to "address the economic risks posed by climate change and stay ahead of emerging risks in our financial system."