Following the passing of the Biden administration’s infrastructure bill, the U.S. president appears to be nearing his decision on whether or not he will reappoint Jerome Powell, the current Federal Reserve Board chairperson. According to a few reports Powell may be chosen, but other reports say the Fed’s Board of Governors member, Lael Brainard, could also be a frontrunner for the position.
President Biden to Choose Fed Chair ‘Fairly Quickly’
Amid the rising inflation and supply chain woes, U.S. president Joe Biden is thinking about who will run the Federal Reserve when Jerome Powell’s term ends next February. Media pundits say the timing “is crucial,” as the U.S. central bank has been discussing tapering back quantitative easing (QE) and adjusting rates upwards. However, this has been a conversation and Fed members have yet to make a decision on tapering large asset purchases and raising the benchmark interest.
Inflation has been rising in America’s lives, with Americans experiencing a decline in their purchasing power over the past 12 months. This week’s data from the consumer price index (CPI) jumped 6.2% from a year ago and stock markets shuddered after the news broke. The latest CPI data even pushed Biden to make a statement about the rising inflation as the U.S. president said the White House would be focused on getting people back to work, “getting prices down,” and “making sure our stores are fully stocked.”
According to various reports, Biden may be in the process of selecting a new Federal Reserve Board Chairperson or he is planning on letting Jerome Powell continue his position. CNN contributors John Harwood and Phil Mattingly explain that “[Jerome] Powell [is] seen as the frontrunner to be Biden’s pick for Federal Reserve chair as he nears a decision.” The CNN report notes that Biden’s decision could happen as early as next week. Biden could also sign the bill for infrastructure on Monday, according to CNN.
Brainard ‘More Aligned With Left-Leaning’ Politicians, Financial Services Committee Members Urge Biden to Choose New Lead, Powell Still ‘Favored’ by ‘Both Sides’
11 days ago, Biden spoke about his decision about the Fed chair position at a news conference and hinted at choosing “fairly quickly.” “I’ve given a lot of thought to it, and I’ve been meeting with my economic advisors on what the best choices are, and we’ve got a lot of good choices,” Biden told reporters. “But I’m not going to speculate now,” the president added. Despite CNN’s report, other editorials claim that Biden may choose the Fed’s Board of Governors member Lael Brainard. Rob Garver, a contributor to voanews.com, says the recent inflation spike may sway Biden’s Fed chair decision.
Garver explains that Powell was a Republican who was selected by Donald Trump as his successor. As far as Brainard is concerned, she is a Democrat and is “more aligned with left-leaning members of her party, such as U.S. senator Elizabeth Warren of Massachusetts,” Garver details. However, Garver further explains that the current Fed chair is “favored” at the moment. Christopher Russo, a research fellow at George Mason University’s Mercatus Center, told VOA’s Garver: “Powell has built up a great amount of credibility with both sides, both Republicans and Democrats.” Russo further added:
Fed set a flexible target for inflation during the pandemic. They will continue to raise inflation after it falls below the target. Powell worked hard to make that clear to skeptical lawmakers.
The reports concerning Biden choosing a new Fed chairperson soon follow the mid-September “sources with ties to Washington,” saying that Biden will renominate Jerome Powell. Three members of the House Financial Services Committee were urging Biden not to pick a Fed Chair who is committed to climate and social justice. U.S. Democratic representatives Alexandria Ocasio Cortez (AOC), Rashida Taib and AyannaPressley highlighted on August 30,:
His leadership has meant that the Federal Reserve took very few actions to address the threat climate change presents for our financial system.
The recently passed 1,600-page ‘Build Back Better’ infrastructure bill allocates around $550 billion toward fighting the alleged climate crisis in the United States. Despite the massive amounts of quantitative easing (QE) tactics and a benchmark rate suppressed at zero, Jerome Powell’s efforts since being appointed by former president Trump may not be good enough for members of the Democratic party.
Do you have any thoughts about Joe Biden choosing to be the next Federal Reserve Board Chairperson after signing the infrastructure bill? Please comment below to let us know your thoughts on this topic.
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