President BidenJoe Biden Michael Flynn Says From US: ‘We Have To Have A Religion’ White House Tries To Change Messages On Economy Biden Expresses ‘Great Concern’ Over Belarus-Poland Border Crisis MORE He faces an important decision about whether he should reappoint Federal Reserve Chairman Jerome Powell for another term.
With inflation on the rise and the administration working to pull the economy out of its stagnation due to the coronavirus pandemic, Biden’s choice to lead the central bank could prove particularly momentous as Republicans go on the attack ahead of the midterm elections. of the next year.
Fed watchers see Powell likely to win another term after his current one rose in February thanks to his broad cross-party support, the bank’s successful response to the pandemic-fueled market collapse, and his own overlap with the views of Biden on the job market. As a Republican chosen by former Presidents Obama and Trump to Fed posts, Powell also occupies a strange bipartisan lane in a bitterly divided Congress.
But Biden is being pushed from the left to replace Powell with a Democrat more closely aligned with his support for stricter financial regulation and a more aggressive response to climate change, two areas in which Powell does not meet the demands of the liberals. .
“The fact that it is still so quiet indicates one of three things. Or that they’ve been extremely good at keeping things quiet, two, they haven’t made a decision and are probably not making a decision for a while, or three, they are trying to gauge the politics of the decision. All of those things can obviously delay any kind of movement in anything, ”a Biden ally told The Hill.
Both Powell and Fed Governor Lael Brainard, the only Democrat on the Fed’s board and the favorite pick of progressives, were seen in the White House last week, though the administration declined to say why. The meeting followed Biden’s comments in Scotland, when he told reporters about the appointment of a president: “We will make those announcements quite quickly.”
Biden has said little more about his priorities for the upcoming election beyond a statement Wednesday that emphasizes his commitment to the Fed’s independence “to monitor inflation and take the necessary steps to combat it.”
And the White House has been silent on the timing of Biden’s announcement.
“I don’t have a timetable. I know this is an important question.” Undersecretary of Press Karine Jean-PierreKarine Jean-Pierre In the White House, frustration over who can ask questions Will the Supreme Court accept the ‘alternative solution’ to Biden’s vaccine as constitutional? Companies left in limbo by mandate COVID-19 MORE he told reporters on Monday when asked if the president would make a decision in days, weeks or months.
“You know, I’m not going to, you know, go into what the president, how is he, is making his decision. All I can say is that this is incredibly important to the president, and he is taking it very seriously, ”said Jean-Pierre when asked if the number of vacancies on the board influences the decision to keep Powell.
The White House had no comment on Friday when asked for a time update.
Biden’s allies have said they haven’t heard anything concrete about whether Powell will be rebranded, and that it is not a major issue that White House staff are discussing with those outside of the administration.
While the president’s silence has further fueled speculation, most Fed analysts see Powell’s odds increasing as time goes on.
Biden’s push to cement his economic agenda, debates over government funding and defense legislation, and the fiscal cliff looming in early December will suck up floor time and political capital in the tightly divided Senate. And with annual inflation hitting a 30-year high of 6.2 percent in October, the pressure is mounting on both the Fed as an institution and Biden’s potential nominee.
“The rising importance of inflation makes it even more difficult to confirm, probably for both of us. But Powell has a lot more room to maneuver in the Senate than Brainard,” said Sam Bell, founder of Employ America, a nonprofit research organization. of profit that promotes policies. to maximize employment.
Bell said both Powell and Brainard “are quite emblematic of the changes at the Fed” toward waiting for unemployment to go down as low as possible before raising interest rates. The Fed had generally raised interest rates when inflation appeared to be rising toward its annual target of 2 percent, most recently in 2018, but probably at the cost of a stronger labor market.
Simply renaming Powell, who won 82 votes for confirmation in 2017, would allow Biden to avoid a more disorderly battle for a replacement nominee while keeping a fully employed Fed chief in the seat. More than a dozen Republicans and some moderate Democrats have already backed Powell for another term, a crucial boost in the 50-50 Senate, while only the Sen. Elizabeth warrenElizabeth Warren Sanders backs Kaiser Permanente workers ahead of Monday’s strike Sunrise Wisconsin backs Tom Nelson in Senate Democratic primary McConnell wins, Biden loses, Trump fumes MORE (D-Mass.) He has announced his opposition.
Like Powell, Brainard can also draw on decades of experience in Washington and deep support among liberal lawmakers. His supporters also tout his broad portfolio of international finance experience and, unlike Powell, his consistent support for stricter banking rules and climate oversight.
Those assets could carry powerful weight to Biden, who has also stocked his administration with several innovative forward-thinking financial regulators. Brainard would be the second woman to chair the Fed, after the Secretary of the Treasury. Janet yellenJanet Louise YellenSunday Shows Progress: Biden Administration Faces Rising Inflation Rich Pays More Than Their Fair, Liberals Know It The Hill’s Morning Report – Presented By Facebook – The Republican Party Dealt The 2022 Coup , see the problems of the Trump era MORE, whom Biden chose to be the first woman to hold that position.
“Recognizing Powell’s strengths, I still think that the great threat to his re-election is a smart, intelligent woman, known to the markets, an expert in monetary policy and regulation, climate risk and financial technology. If this Administration prioritizes diversity, it seems like Brainard is a no-brainer, ”tweeted Sheila Bair, a Republican who chaired the Federal Deposit Insurance Corp. and endorsed Warren’s 2020 presidential bid.
Brainard would likely win the support of a majority of Democratic senators if confirmed, but it is unclear whether his views on the climate could be approved with the senator. Joe manchinJoe ManchinClimate emergency is causing widespread anxiety among youth Sunday shows progress: Biden administration faces peak inflation Inflation poses new challenges for progressives MORE (W.Va.), one of the few Democratic advocates of the fossil fuel industry. Her deep ties to the Democrats have also made her a bid for the top spot, something that hasn’t been possible for many, if not all, Republicans.
“Even if Brainard was nominated now, I’m not suggesting they wouldn’t confirm it. I think it would be a more complicated process and, if you’re from the White House, you’d have to take that into account,” said Bell.