President Joe Biden is detailing his decision to nominate Federal Reserve Chairman Jerome Powell to a second term as leader and promote Fed Gov. Lael Brainard to vice chair of the globe’s most powerful central bank.
The president, who is speaking from Washington, announced his intent to nominate Powell and Brainard to the Fed’s top positions earlier on Monday after weeks of speculation. Investors and Capitol Hill staff had wondered whether Biden would nominate Brainard, a Democrat, to replace Powell, a Republican, at the expiration of his first term in February.
The Fed is a powerful independent body in the U.S. government that is empowered by Congress to adjust interest rates to keep prices stable and maximize employment. It’s also in charge of regulating the country’s largest banks like Bank of America, Wells Fargo and Goldman Sachs.
Though some progressive Democrats had hoped Biden would choose a Fed chief with a greater focus on climate change or bank regulation, Powell won the respect of politicians across the political spectrum in 2020 for the Fed’s role in easing the economic fallout caused by the Covid-19 pandemic.
Brainard is, in general, more apt to favor tighter bank oversight and has often opposed the central bank’s efforts to ease laws put into place in the aftermath of the financial crisis.
The two are seen as similar on monetary policy – that is, how the Fed adjusts interest rates and otherwise makes cash available in the economy – and are thought to have congruent views on how to balance inflation with maximum employment.
Both are expected to clear the Senate confirmation process with ease.