Biden chose Jerome Powell (Jerome Powell) for the second term of the Federal Reserve because the United States is fighting the new crown virus and inflation

Read Time:7 Minute, 25 Second

Jerome Powell has guided the Fed and the U.S. economy through the shocking and sudden Covid-19 recession by implementing unprecedented monetary stimulus measures. He has been nominated for re-election as the chairman of the U.S. Central Bank.

President Joe Biden announced the news on Monday morning. The speculation in the previous weeks was that the advancement of progressives might allow Fed Governor Lyle Brainard to obtain the position.

Brainard will serve as the vice chairman of the board of directors; it is widely expected that she will receive a separate supervisory vice chairman responsible for overseeing the national banking system. As vice chairman, she will succeed Richard Clarida (Richard Clarida), whose term will expire on January 31, 2022.

Read more: Who is Lael Brainard?

“As I said before, we cannot just return to the state before the pandemic. We need to rebuild our economy better. I believe Chairman Powell and Dr. Brainard will focus on maintaining low inflation, stable prices, and adequate supply. Employment will make our economy stronger than ever before,” Biden said in a statement.

The nomination will then be submitted to the Senate for confirmation.

In making this decision, Biden praised the “decisive” actions taken by the Powell Fed in the early stages of the pandemic.

The Federal Reserve has launched an unprecedented series of loan programs, and at the same time reduced interest rates to near zero, and formulated a monthly bond purchase program, which will increase the central bank’s holdings of U.S. Treasury bonds and mortgage-backed securities by more than $4 trillion .

A White House statement said: “Chairman Powell has played a stable leadership role during unprecedented challenging times, including the largest recession in modern history and attacks on the independence of the Federal Reserve.” “During that time, our country was the leader. One of the macroeconomists, Lael Brainard, played a key leadership role at the Federal Reserve, working with Powell to help drive our country’s strong economic recovery.”

The announcement coincided with a modest boost in stock market futures, while government bond yields rose across the board.

The market is closely watching the steps the Fed will follow when it lifts its large-scale policy support.

Officials have stated that they will begin to reduce bond purchases by about $15 billion per month, which will make the program likely to end in late spring or early summer of 2022.

Raising interest rates is another matter.

So far, most Fed officials have stated that they will not consider raising interest rates, at least until bond purchases are gradually over. However, the market has been looking for a faster interest rate schedule, and the initial rate hike is now priced in June 2022.

Controversy in recent days

Although Powell occupied this day, it was not without controversy.

The Federal Reserve has recently come under fire for its ethics scandal, and many of its officials traded stocks when the agency implemented policies aimed at boosting the market. Powell revealed that he owns municipal bonds that the Fed is also buying, and he also buys and sells funds related to a wide range of stock market indexes.

At the same time, the Fed has been hit by a faster-than-expected inflation rate—in fact, this is the fastest rate in 30 years. Since September 2020, the Fed’s official policy has been to allow inflation to be slightly higher than the standard 2% target while allowing full and inclusive employment, but prices have been far above this level.

Powell insisted that once the pandemic-related factors return to normal, inflation will cool down. But recent data has raised questions about the so-called average inflation target, which marks a historic shift in central bank monetary policy.

Inflation was also accompanied by a rapid economic recovery and the unemployment rate fell from 14.8% at the peak of the pandemic to the current 4.6%.

The White House statement stated that the recovery “proves the success of the President’s economic agenda, and also the decisive action taken by Chairman Powell and the Federal Reserve to mitigate the effects of the pandemic and get the US economy back on track.”

Brainard has become a key force in the race to lead the Fed over the next four years. She put forward points on several issues that are important to the Biden administration, especially the Fed’s need to protect the banking system from destructive climate change events.

As the former deputy secretary of the Treasury during the Obama administration, Brainard has also been a staunch supporter of the digital dollar.

The White House statement emphasized the importance of the Fed’s progress in the coming years.

Biden said that Powell and Brainard “also deeply believe with me that urgent action is needed to deal with the economic risks posed by climate change and maintain a leading position in our financial system.”

“Fundamentally speaking, if we want to continue to build on this year’s economic success, we need the stability and independence of the Federal Reserve — after the fierce trials of the past 20 months, I am fully confident that Chairman Powell and Dr. Brainard will provide The strong leadership that our country needs,” he added.

Biden has more work to do with the Fed: there is a vacant position in the board of directors, and the vacancy for Clarida will need to be filled in January. He also needs to appoint a vice chairman responsible for oversight, Randal Quarles has held this position until his term expires in October.

Congress’s initial response to Monday’s news was positive.

Senator Sherrod Brown, the chairman of the key Senate Banking Committee, who will hear the nomination first, said: “I look forward to working with Powell to stand up against Wall Street, stand up for the workers, and let them share the prosperity they have created.”

Fight back from Covid

President Donald Trump appointed Powell to this position in 2018, which is a bit unexpected. Trump chose to ignore then Chairman Janet Yellen. This was an unusual move because Fed leaders are rarely removed after one term. Former President Barack Obama initially appointed Powell as governor in 2014 for a 14-year term.

Although Trump nominated Powell, he later severely criticized the Fed chairman when the Fed raised interest rates seven times in 2017 and 2018. Economic recovery.

As for Brainard, it is widely expected that she will be appointed as the vice chairman of supervision, which is an important position for the Federal Reserve to supervise the national banking system.

The Federal Reserve is mandated by Congress to complete two tasks: maximizing employment in the United States and maintaining stable inflation. Its leader, the president, is nominated by the president and votes on how to adjust interest rates, supervise the country’s largest bank, and monitor the health of the economy.

In response to the soaring unemployment rate and economic recession that began in the spring of 2020, the central bank significantly cut interest rates and began to purchase approximately US$120 billion in US Treasury bonds and mortgage-backed securities each month. It has also developed various loan programs designed to keep the fixed-income market under tremendous pressure in the early stages of the pandemic.

Economists believe that this rapid and large-scale response stabilized financial markets and subsequently suppressed long-term interest rates. Lower interest rates make it easier for companies to obtain loans to build new factories, or make it easier for individuals to buy houses or cars.

Mike Feroli, chief U.S. economist at JPMorgan Chase, said via e-mail: “Under Powell’s leadership, the Federal Reserve pays more attention to letting the economy operate with maximum employment.”

“This is a goal that progressive economists have been advocating for a long time, and may be in line with Biden’s agenda.”

Treasury Secretary Janet Yellen, one of Biden’s top economic advisers and his Fed-nominated adviser, told CNBC earlier this month that she is satisfied with the work of the Fed chairman. Yellen was the first woman to serve as the chairman of the Federal Reserve and the country’s first female finance minister.

Yellen said: “I talked to him about the candidate and suggested that he pick an experienced and credible person.” “I think Chairman Powell did a good job.”

Powell is also very popular on Capitol Hill. Since he succeeded Yellen in February 2018, lawmakers from both parties have praised his leadership and amiability.

This news may disappoint progressives, including Senator Elizabeth Warren of Massachusetts. She said in September that the Fed’s role in deregulation of banks in recent years has made Powell a “dangerous figure” and she will oppose him. Renomination.

This is breaking news.Please check back here for updates.

If you want to know more about business please go to

0 %
0 %
0 %
0 %
0 %
0 %
We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners. View more
Cookies settings
Privacy & Cookie policy
Privacy & Cookies policy
Cookie name Active

Who we are

Suggested text: Our website address is:


Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection. An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: After approval of your comment, your profile picture is visible to the public in the context of your comment.


Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.


Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year. If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser. When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select "Remember Me", your login will persist for two weeks. If you log out of your account, the login cookies will be removed. If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website. These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue. For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where we send your data

Suggested text: Visitor comments may be checked through an automated spam detection service.
Save settings
Cookies settings