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Politics: Biden to keep Powell as Fed chair, Brainard gets vice chair

Inflation raises focus on Biden Fed pick

  Inflation raises focus on Biden Fed pick President Biden faces a major decision on if he should renominate Federal Reserve Chairman Jerome Powell for another term.With inflation soaring and the administration working to bring the economy back from its coronavirus pandemic doldrums, Biden's choice to lead the central bank could prove particularly consequential as Republicans go on the attack ahead of next year's midterms.Fed-watchers consider Powell likely to win another term after his current one is up in February thanks to his broad support among both parties, the bank's successful response to the pandemic-driven market meltdown and his own overlap with Biden's views on the job market.

WASHINGTON (AP) — President Joe Biden announced Monday that he's nominating Jerome Powell for a second four-year term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market.

FILE - Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee on Capitol Hill in Washington, Feb. 12, 2020. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, File) © Provided by Associated Press FILE - Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee on Capitol Hill in Washington, Feb. 12, 2020. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, File)

Biden also said he would nominate Lael Brainard, the lone Democrat on the Fed’s Board of Governors and the preferred alternative to Powell among many progressives, as vice chair, the No. 2 slot.

Top Republican warns Biden against picking Brainard for Fed chair

  Top Republican warns Biden against picking Brainard for Fed chair Sen. Pat Toomey (Pa.), the top-ranking Republican on the Senate Banking Committee, on Thursday warned President Biden against picking Lael Brainard to serve as the next chair of the Federal Reserve, signaling a Senate fight over her nomination if she's selected."I have a lot of serious concerns about Governor Brainard if she were to be nominated to be chair," Toomey said after emerging from a Banking Committee hearing Thursday morning.Biden is expected to announce his decision on who should chair the Fed in the next few days. The two leading candidates for the job are Brainard and current chairman Jerome Powell, who was appointed by former President Trump.

FILE - Chairman of the Federal Reserve Jerome Powell listens during a Senate Banking Committee hearing on Capitol Hill in Washington, Dec. 1, 2020. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, Pool, File) © Provided by Associated Press FILE - Chairman of the Federal Reserve Jerome Powell listens during a Senate Banking Committee hearing on Capitol Hill in Washington, Dec. 1, 2020. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, Pool, File)

A separate position of vice chair for supervision, a bank regulatory post, remains vacant, along with two other slots on the Fed's board. Those positions will be filled in early December, the president said.

Joe Biden channels his inner Obama by picking Jerome Powell for the Fed

  Joe Biden channels his inner Obama by picking Jerome Powell for the Fed By choosing to stick with Jerome Powell, who Donald Trump selected to be Federal Reserve chairman in 2017, President Biden proved that he learned a valuable lesson from his former boss about continuity over partisan politics during challenging economic times. © Al Drago/Bloomberg/Getty Images Jerome Powell, chairman of the U.S. Federal Reserve, arrives for a Senate Banking Committee hearing in Washington, D.C., U.S., on Thursday, July 15, 2021. Powell said yesterday the U.S. economic recovery still hasn't progressed enough to begin scaling back the central bank's massive monthly asset purchases.

“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," Biden said in a statement.

Biden's decision, reached after extensive consideration, strikes a note of continuity and bipartisanship at a time when surging inflation is burdening households and raising risks to the economy's recovery. In backing Powell, a Republican who was first elevated to his post by President Donald Trump, Biden brushed aside complaints from progressives that the Fed has weakened bank regulation and has been slow to take account of climate change in its supervision of banks.

FILE - Chairman of the Federal Reserve Jerome Powell listen during a Senate Banking Committee hearing on Capitol Hill in Washington, Dec. 1, 2020. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, Pool, File) © Provided by Associated Press FILE - Chairman of the Federal Reserve Jerome Powell listen during a Senate Banking Committee hearing on Capitol Hill in Washington, Dec. 1, 2020. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, Pool, File)

If confirmed by the Senate, Powell would remain one of the most powerful economic officials in the world. By either raising or lowering its benchmark interest rate, the Fed seeks to either cool or stimulate growth and hiring, and to keep prices stable. Its efforts to direct the U.S. economy, the largest in the world, typically have global consequences.

Biden nominates Federal Reserve Chairman Jerome Powell to 2nd term

  Biden nominates Federal Reserve Chairman Jerome Powell to 2nd term President Joe Biden has nominated Federal Reserve Chair Jerome Powell to a second term. He also said he would nominate Dr. Lael Brainard, a longtime Federal Reserve official and former Treasury Department undersecretary, to serve as vice chair of the Board of Governors of the Federal Reserve System.

FILE - Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, Oct. 30, 2019. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, File) © Provided by Associated Press FILE - Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, Oct. 30, 2019. President Joe Biden announced Monday, Nov. 22, 2021 that he's nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed's ultra-low rate policies helped bolster confidence and revitalize the job market. (AP Photo/Susan Walsh, File)

The Fed's short-term rate, which has been pegged near zero since the pandemic hammered the economy in March 2020, influences a wide range of consumer and business borrowing costs, including for mortgages and credit cards. The Fed also oversees the nation’s largest banks.

In a second term, to begin in February, Powell would face a difficult and high-risk balancing act: Rising inflation is causing hardships for millions of families, clouding the economic recovery and undercutting the Fed’s mandate to keep prices stable. But with the economy still 4 million-plus jobs shy of its pre-pandemic level, the Fed has yet to meet its other mandate of maximizing employment.

On The Money — Biden sticks with Powell despite pressure

  On The Money — Biden sticks with Powell despite pressure Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.Today's Big Deal: President Biden has finally made his choices for the top two spots on the Fed board. We'll also look at how women are taking control of key congressional spending posts for the first time ever, and a decisive Black Friday.But first, a throwback to when Creed ruled the world (or at least this NFL halftime show).For The Hill, we're Sylvan Lane, Naomi Jagoda and Aris Folley. Reach us at [email protected] or @SylvanLane, [email protected] or @NJagoda and, [email protected]

If the Fed moves too slowly to raise rates, inflation may accelerate further and force the Fed to take more draconian steps later to rein it in, potentially causing a recession. Yet if the Fed hikes rates too quickly, it could choke off hiring and the economic recovery.

Powell’s re-nomination must be approved in a vote by the Senate Banking Committee and then confirmed by the full Senate, which is considered likely.

Powell, a 68-year-old lawyer by training, was nominated for the Fed’s Board of Governors in 2011 by President Barack Obama after having built a lucrative career in private equity and having served in a number of federal government roles.

Unlike his three immediate predecessors, Powell lacks a Ph.D. in economics. Yet he has earned generally high marks for managing perhaps the most important financial position in the world, especially his response to the coronavirus-induced recession. The downturn quickly wiped out 22 million jobs in the spring of 2020 and sent panic through financial markets.

FILE- In this June 14, 2018, file photo Federal Reserve Board Governor Lael Brainard participates in an open meeting in Washington. President Joe Biden announced Monday, Nov. 22, 2021 that he’s nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed’s ultra-low rate policies helped bolster confidence and revitalize the job market. Biden also said he would nominate Brainard, the lone Democrat on the Fed’s Board of Governors and the preferred alternative to Powell for many progressives, as Vice Chair. (AP Photo/Cliff Owen, File) © Provided by Associated Press FILE- In this June 14, 2018, file photo Federal Reserve Board Governor Lael Brainard participates in an open meeting in Washington. President Joe Biden announced Monday, Nov. 22, 2021 that he’s nominating Jerome Powell for a second term as Federal Reserve chair, endorsing Powell's stewardship of the economy through a brutal pandemic recession in which the Fed’s ultra-low rate policies helped bolster confidence and revitalize the job market. Biden also said he would nominate Brainard, the lone Democrat on the Fed’s Board of Governors and the preferred alternative to Powell for many progressives, as Vice Chair. (AP Photo/Cliff Owen, File)

The subsequent spike in inflation has forced the Powell Fed to dial back its economic stimulus sooner than it had envisioned. At its latest meeting in early November, the central bank said it would start reducing its monthly bond purchases and likely end them by mid-2022. Those purchases have been intended to keep longer-term borrowing costs low to spur borrowing and spending.

Biden sidesteps Fed fight, disappointing progressive allies

  Biden sidesteps Fed fight, disappointing progressive allies President Biden sidestepped a battle over the leadership of the Federal Reserve by disappointing progressive allies and sticking with Jerome Powell, whom Donald Trump nominated as Fed chair four years ago.Senate aides predict Powell will easily have enough votes to secure confirmation to a second term atop the U.S. central bank and warned that Biden would have had a much tougher fight on his hands had he instead picked Lael Brainard, the only Democrat on the seven-member board and the favorite of a number of progressives."You're going to get ample votes for him. I think it's going to be an easy path," said one Senate Democratic aide.

FILE - Federal Reserve Governors Jerome Powell, from left, Daniel Tarullo and Lael Brainard, talk before the start of a Federal Reserve System Board of Governors open meeting in Washington, Friday, June 3, 2016. President Joe Biden announced Monday, Nov. 22, 2021 that he’s nominating Powell for a second term as Federal Reserve chair, endorsing his stewardship of the economy through a brutal pandemic recession in which the Fed’s ultra-low rate policies helped bolster confidence and revitalize the job market. Biden also said he would nominate Brainard, the lone Democrat on the Fed’s Board of Governors and the preferred alternative to Powell for many progressives, as Vice Chair. (AP Photo/Manuel Balce Ceneta, File) © Provided by Associated Press FILE - Federal Reserve Governors Jerome Powell, from left, Daniel Tarullo and Lael Brainard, talk before the start of a Federal Reserve System Board of Governors open meeting in Washington, Friday, June 3, 2016. President Joe Biden announced Monday, Nov. 22, 2021 that he’s nominating Powell for a second term as Federal Reserve chair, endorsing his stewardship of the economy through a brutal pandemic recession in which the Fed’s ultra-low rate policies helped bolster confidence and revitalize the job market. Biden also said he would nominate Brainard, the lone Democrat on the Fed’s Board of Governors and the preferred alternative to Powell for many progressives, as Vice Chair. (AP Photo/Manuel Balce Ceneta, File)

A swift pullback in bond purchases would allow the Fed to raise rates much earlier than its policymakers had expected last spring, when rate hikes were projected to begin in late 2023. In September, Fed officials moved up their projection to late 2022.

Powell has also avoided much of the blame, at least on Capitol Hill, for the jump in inflation to a three-decade high, even though one of the Fed’s mandates is to maintain stable prices through its control of interest rates. Republicans in Congress have instead pointed to President Joe Biden’s economic policies as the main culprit, and some have already endorsed Powell’s reappointment.

In recent weeks, however, the Powell Fed has come under some criticism from economists for being too slow to recognize the persistence of high inflation and the need to act soon to raise rates.

Biden faces new pressure from climate groups after Powell pick .
President Biden is under fresh pressure from climate activists after rejecting their push to replace Federal Reserve Chair Jerome Powell. Biden announced Monday he would renominate Powell, a Republican first appointed to the role by former President Trump, to another four-year term leading the Fed board despite intense pressure from the left. He also tapped Fed Governor Lael Brainard, the only Democrat on the bank's board, to serve as viceBiden announced Monday he would renominate Powell, a Republican first appointed to the role by former President Trump, to another four-year term leading the Fed board despite intense pressure from the left.

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