President Joe Biden Monday nominated Jerome Powell for a second four-year term as Federal Reserve chair. Biden said he would nominate as vice chair Lael Brainard, the lone Democrat on the Fed’s Board of Governors. President Donald Trump elevated Powell, a Republican, to the post initially. “When our country was hemorrhaging jobs last year, and there was panic in our financial markets, Jay’s steady and decisive leadership helped to stabilize markets and put our economy on track to a robust recovery,” Biden said. Powell’s second term will start in February. The Fed is likely to begin raising its benchmark interest rate next year. However, there was speculation on Powell’s reappointment. Several environmental and public interest groups have started a campaign in support of Brainard for months. Some critics said Powell had loosened bank regulations that were put in place after the 2008-2009 financial crisis.
Two senators also expressed opposition to Powell last week. They said he was insufficiently committed to using the Fed’s regulatory tools to combat global warming. Biden said Powell had committed to making climate change “a top priority” and had agreed to make sure “that our financial regulations are staying ahead of emerging risks.”
“Jay, along with the other members of the Fed Board that I will nominate must ensure that we never again expose our economy and American families to those kinds of risks,” he said at the White House, referring to the 2008 financial crisis. Three more positions on the Fed’s Board of Governors, including the vice chair for supervision, a top bank regulatory post, is expected to be filled in early December. Biden said that some Democrats encouraged him to pick a new Fed chair, for a “fresh start.” But he said he wanted to go in a different direction. “We need stability and independence at the Federal Reserve,” he said. “I believe Fed leadership with broad and bipartisan is important, especially now, in such a politically divided nation.”