Biden's Pick of Powell for Fed Chairman Hailed as ‘Smart Choice’ Despite Progressives' Ire

Republican Jerome Powell was originally appointed to the Federal Reserve's governing board by former President Barack Obama and elevated to the helm by ex-President Donald Trump.

President Joe Biden has opted to nominate Jerome Powell for a second term as chair of the US Federal Reserve. The current Fed governor, Lael Brainard, seen as aleading contender to replace Powell, was nominated to serve as vice-chair, replacing Richard Clarida.

According to Senate aides cited by The Hill, Powell, whom Donald Trump nominated as Fed chair four years ago, will drum up enough votes to secure confirmation.

“You’re going to get ample votes for him. I think it’s going to be an easy path,” a Senate Democratic aide was cited by The Hill as saying.

According to aides, Biden would have risked a tougher battle if he had picked Lael Brainard, the sole Democrat on the seven-member board. Choosing Brainard, favoured by a number of progressives to replace Powell, could have ended in defeat, claim cited sources. According to them, Republicans might have convinced Sens. Joe Manchin (D-W.Va.) or Kyrsten Sinema (D-Ariz.) to vote with them.

“Powell is the obvious smart choice when you’re an administration that doesn’t need an evil fight. Powell is the much easier path and Powell is a Republican who can talk to a 50-50 Senate about inflation. He’s an easier messenger for the president,” an aide purportedly added.

Last week, Manchin, a crucial Senate Democratic vote, was cited by the outlet as “looking very favourably” at Powell after they had discussed "inflation and quantitative easing."

Progressives, meanwhile, are described as having been disappointed by the choice of Powell, whom Sen. Elizabeth Warren (D-Mass.) called “a dangerous man to head up the Fed.” “It’s no secret I oppose Chair Jerome Powell’s renomination, and I will vote against him,” Warren said in a statement on Monday.

The Federal Reserve is seen in Washington, Monday, Nov. 16, 2020. President Donald Trump's unorthodox choice for the Federal Reserve Board of Governors, Judy Shelton, could be approved by the Senate this week, according to Majority Leader Mitch McConnell's office.

© AP Photo / J. Scott Applewhite

She warned his nomination underscored the importance of the Senate confirming Brainard as Fed vice-chair. Warren added that Powell’s “failures on regulation, climate, and ethics” rendered the position of vice-chair of supervision critically important.

Jeff Hauser, executive director at the Revolving Door Project, a liberal advocacy group, was cited as saying: “I think it’s a huge deal. The Federal Reserve chair is in charge of implementing [the] Dodd-Frank [Wall Street reform law] and a whole swath of financial regulatory laws and we don’t trust Jerome Powell on those issues whatsoever.”

Progressives were cited as warning of Powell’s “shortsighted” reluctance to allow the Federal Reserve decision-making to be influenced by climate considerations.

“President Biden’s re-nomination of Chair Powell doubles down on reckless Wall Street deregulation and dangerous dawdling on climate-related threats to the financial system, flouting Biden’s own whole-of-government approach to stemming climate threats,” David Arkush, managing director of Public Citizen’s Climate Programme, was cited by the publication as saying.

As stock markets rallied in the wake of the nomination, the Senate Banking Committee Chairman Sherrod Brown (D-Ohio) and Sen. Pat Toomey (R-Pa.), member of the Banking panel, both praised Biden’s decision to renominate. “Chair Jerome Powell has led our economy through a historic pandemic, and under his and President Biden’s leadership, unemployment has fallen and workers are seeing increased bargaining power,” Brown said in a statement.

"Powell and Brainard share the Administration's focus on ensuring that economic growth broadly benefits all workers," the White House said.