US President Biden Nears Decision to Choose Fed Chair – Reports Indicate Toss-up Between Powell and Brainard
U.S. President Joe Biden is contemplating who will lead the Federal Reserve after Jerome Powell’s term expires next February amid rising inflation and supply chain woes. Media pundits believe the timing of is critical. The U.S. central banks have been discussing reducing quantitative easing (QE), and raising rates. These are conversations thus far, and the Fed members have yet to decide on reducing large asset purchases and increasing the benchmark rate.
Inflation has been rising in America’s lives, and the purchasing power of Americans has been declining over the past 12 months. Stock markets shuddered when the news of the rising inflation was announced. The consumer price index (CPI), which rose 6.2% this week, shocked investors. Biden made a statement about rising inflation after the U.S. president stated that the White House would focus on getting people back into work, ‘getting the prices down’ and’making certain our stores are fully stocked’.
According to various reports, Biden is either in the process of selecting a new Federal Reserve Board Chairperson or intends to keep Jerome Powell’s post. John Harwood and Phil Mattingly , CNN contributors, explain that “[Jerome] Powell [is]] considered the frontrunner to become Biden’s Federal Reserve Chair as he approaches a decision. According to CNN, Biden could make his decision as soon as next week. Biden is expected to sign the new bill on Monday.
Brainard is ‘More Aligned with Left-Leaning Politicians, Financial Services Committee members Urge Biden To Choose New Lead, Powell Still Favored by ‘Both Sides.
Biden made the announcement about his decision regarding the Fed chair position at a news conference 11 days ago and suggested that he would make it happen ‘fairly quickly. Biden stated that he had given it a lot thought and met with his economic advisors to discuss the best options. The president said, “But I’m no longer going to speculate now.” CNN’s report is not the only one that suggests Biden could choose Lael Brainard to be the Fed’s Board of Governors Member. Rob Garver, a contributor at voanews.com, believes that the recent inflation spike could influence Biden’s Fed Chair decision.
Garver explains that Powell is a Republican who was elected by the former U.S. president Donald Trump. Brainard believes that Brainard is a Democrat. She is more aligned with left-leaning senator Elizabeth Warren of Massachusetts. Garver elaborates. Garver explains, however, that the Fed’s current chair is favored at the moment. Christopher Russo is a Mercatus Center research fellow at George Mason University. He said to Garver that Powell has gained a lot of credibility from both Republicans and Democrats. Russo added:
The Fed established a flexible average inflation target in the wake of the pandemic. This means that inflation will rise after periods when it has been below target. Powell has spent a lot of time explaining the importance of this policy to skeptical members of Congress.
Biden’s nomination of Jerome Powell will be the next in a series of reports about his selection for Fed chairperson. Three members of the House Financial Services Committee urged Biden for a new Fed Chair who would address climate change and social justice. Ayanna Pressley, Rashida Tlaib and Alexandria Ocasio Cortez (AOC) are U.S. Democratic representatives.
The Federal Reserve, under his leadership has done very little to reduce the risks that climate change poses for our financial system.
The 1,600-page “Build Back Better” infrastructure bill has just been passed and allocates $550 billion to combat the climate crisis in the United States. Jerome Powell’s efforts to combat the alleged climate crisis in the United States may not have been enough despite the large amounts of quantitative ease (QE) tactics and a low benchmark rate.