It was Barack Obama who first appointed Jerome Powell to the Federal Reserve’s Board of Governors about a decade ago. Donald Trump elevated him to lead the Fed in 2018 — though the Republican president spent a fair amount of time whining incessantly about Powell and raising the specter of firing him.
As Powell’s four-year term neared its end, it was far from clear whether he’d get a second. This morning, as NBC News reported, the White House ended the speculation.
President Joe Biden on Monday renominated Jerome Powell as Federal Reserve chairman, ending months of speculation over who would run the central bank for the next four years, the White House announced in a statement…. Fed governor Lael Brainard was nominated to serve as vice chair, the White House also announced.
Powell was not without critics, primarily on the left. As NBC News report added, the Fed chair “had drawn ire from some progressives who have pushed the central bank to expand its dual mandate of keeping people at work and prices in check, and focus more on climate change and racial equity.”
But the dispute did not fall neatly along traditional ideological lines. The Washington Post’s Catherine Rampell, who tends to see economic debates through a relatively progressive lens, made the case a few months ago that Powell’s record has plenty for the left to like.
“He safeguarded the Fed’s political independence when Trump tried to bully him into pursuing partisan policies,” Rampell noted. “He took aggressive, early action to shepherd the economy through a pandemic. Perhaps most significantly, he reoriented the Fed’s mission toward creating more job opportunities for the most vulnerable Americans.”
The columnist added, “Last year, the bank announced a new framework that allows for moderately higher inflation and redefines maximum employment as a ‘broad-based and inclusive goal.’ Powell and other Fed colleagues have advocated paying more attention to unemployment rates for Black people, workers with less education and other populations often left behind even in supposedly ‘good’ economies.”
And while I have no doubt this record mattered to the president and his team, let’s not brush past the political reality on Capitol Hill: The Federal Reserve will need to be confirmed in an evenly divided Senate. Biden wasn’t eager to have a prolonged confirmation fight over any of the progressive contenders whose names were floated as possible Powell successors.
In other words, Powell’s record, coupled with his relatively broad support on Capitol Hill, made him the safe choice.
Indeed, it wasn’t long after this morning’s announcement that the top two members of the Senate Banking Committee — Democratic Chairman Sherrod Brown and Republican Ranking Member Pat Toomey — quickly endorsed Powell’s renomination. Several Democratic and Republican senators soon followed, backing Biden’s announcement.
The president still has some political capital, and he clearly intends to invest it elsewhere.
