US President Joe Biden on Monday announced that he intends to nominate Jerome Powell for a second term as Federal Reserve chairman and to nominate Lael Brainard as vice chair.
“Chair Powell has provided steady leadership during an unprecedentedly challenging period, including the biggest economic downturn in modern history and attacks on the independence of the Federal Reserve,” Xinhua news agency quoted a statement by the White House as saying.
The Republican Fed chair, whose four-year term expires in February, is backed by Republican lawmakers and Treasury Secretary Janet Yellen, but has drawn criticism and opposition from some progressive Democrats due to Fed officials’ controversial stock trading during the pandemic, and Fed policies.
Powell “has taken too many actions to weaken the Fed’s oversight of our largest banks and deregulate Wall Street,” and renominating him for another term “is not a risk worth taking,” Democratic Senator Elizabeth Warren, who also opposed Powell’s nomination in 2018, said in an earlier hearing.
Progressives have previously floated the idea for Fed board member Lael Brainard to be Powell’s successor.
Republican senators, despite disagreeing with Powell on inflation and other issues, are concerned that a replacement could be more liberal, and would likely support Powell’s second-term confirmation.
Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018 for a four-year term, according to the White House statement. His term as a member of the Board of Governors will expire on January 31, 2028.
Brainard took office as a member of the Board of Governors of the Federal Reserve System in June 2014 to fill an unexpired term ending January 31, 2026, the statement showed.
“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.
“Together, they also 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,” Biden continued.
“Fundamentally, 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,” he said.
Earlier this month, Federal Reserve Governor Randal Quarles said he would resign from the central bank at the end of December, giving the Biden administration three open spots on the central bank’s seven-seat Board of Governors. Federal Reserve Vice Chairman Richard Clarida’s term as governor expires early next year.
The seven-seat Board of Governors sets interest rate policy with the central bank’s 12 regional bank presidents, five of whom can vote on policy meeting. Regional bank presidents rotate through their voting seats, but the New York Fed has a constant vote.
In September, two Fed regional bank presidents, Boston Federal Reserve Bank President Eric Rosengren and Dallas Federal Reserve Bank President Robert Kaplan, resigned from their posts amid controversy over stock trading during the Covid-19 crisis.