US President Biden approaches decision to elect Fed leader – Reports indicate toss-up between Powell and Brainard – Economics Bitcoin News

Following the adoption of the Biden Administration’s Infrastructure Act, it appears that the US President is approaching his decision on whether to appoint Jerome Powell, the current head of the Federal Reserve Board. According to a few reports, Powell could be elected, but other reports say that the Fed̵[ads1]7;s board member, Lael Brainard, could also be a frontrunner for the position.

President Biden elects Fed leader ‘fairly quickly’

In the midst of rising inflation and supply chains, US President Joe Biden is thinking about who will run the Federal Reserve when Jerome Powell’s term ends next February. Media experts say the timing is “crucial”, as the US Federal Reserve has discussed the reduction of quantitative easing (QE) and upward adjustment of interest rates. Of course, these have only been talks so far, and the members of the Fed have not yet decided to scale down large asset purchases and raise the benchmark interest rate.

Meanwhile, rising inflation has raised its ugly head in American life, and purchasing power has been eroded over the past 12 months. This week’s data from the consumer price index (CPI) jumped 6.2% from a year ago, and the stock markets were shaking after the news. The latest CPI data even pushed Biden to make a statement about rising inflation when the US president said that the White House would be focused on getting people back to work, “getting prices down” and “making sure that our stores are fully stocked. “

Various reports now say that Biden is in the process of electing a new chairman of the Federal Reserve or plans to let Jerome Powell keep the position. CNN contributors John Harwood and Phil Mattingly explain that “[Jerome] Powell [is] seen as the frontrunner to be Biden’s choice for the Federal Reserve leader as he approaches a decision. ” The CNN report notes that Biden’s decision could take place as early as next week. It is also assumed that Biden will sign the new infrastructure bill on Monday.

Brainard ‘more in line with left-wing’ politicians, members of the finance committee urge Biden to elect new leader, Powell still ‘preferred’ by ‘both sides’

Eleven days ago, Biden spoke about his decision on the Fed leadership position at a press conference and suggested choosing “fairly quickly”. “I have thought about it a lot, and I have met with my financial advisers about what the best choices are, and we have many good choices,” Biden told reporters. “But I will not speculate now,” the president added. Despite CNN’s report, other editorials claim that Biden can elect Fed Chairman Lael Brainard. Rob Garver, a contributor to voanews.com, says the recent rise in inflation may affect Biden’s Fed leadership decision.

Garver emphasizes that Powell is a Republican and was elected by former US President Donald Trump. As for Brainard, she is a Democrat and is “more in line with left-wing members of her party, such as US Senator Elizabeth Warren of Massachusetts,” Garver said. However, Garver further explains that the current Fed chair is “preferred” at the moment. Christopher Russo, a fellow at George Mason University’s Mercatus Center, told VOA’s Tanners: “Powell has built a great deal of credibility on both sides, both Republicans and Democrats.” Russo added:

In the pandemic, the Fed adopted a flexible average inflation target, which means that they will drive inflation above the target after periods in which it ran below the target, and Powell has done much to explain the importance of this policy to skeptics in Congress. .

Reports that Biden will elect a new Fed leader will soon follow “sources with ties to Washington” in mid-September, saying Biden will rename Jerome Powell. However, three politicians from the House Financial Services Committee have called on Biden to elect a new Fed leader who will address social justice and climate change. U.S. Democratic Representatives Alexandria Ocasio-Cortez (AOC), Rashida Tlaib and Ayanna Pressley stressed on August 30:

Under his leadership, the Federal Reserve has taken very little action to reduce the risk posed by climate change to our financial system.

The recently adopted 1600-page ‘Build Back Better’ infrastructure bill allocates around $ 550 billion to combat the alleged climate crisis in the United States. Despite the enormous amount of quantitative easing (QE) tactics and a reference rate suppressed to zero, Jerome Powell’s efforts since he was appointed by former President Trump may not be good enough for members of the Democratic Party.

What do you think about Joe Biden possibly electing a new Federal Reserve chairman next week after signing the new infrastructure law? Tell us what you think about this topic in the comments section below.

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