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Monday, November 29, 2021

Biden to keep Powell as Fed chairman, Brainard to get vice president

President Joe Biden said on Monday he is nominating Jerome Powell for a second four-year term as Federal Reserve chair, backing his leadership of the economy through a brutal pandemic downturn in which the Fed’s Ultra-low rate policies helped boost confidence and revive the job market. ,

Biden also said he would nominate Vice President Lyle Brainard as Powell’s preferred choice among the lone Democrats and many progressives on the Fed’s board of governors.

His decision strikes a note of continuity and bipartisanship at a time when rising inflation is burdening households and posing risks to the economy’s recovery. Backing Powell, a Republican promoted to his post by President Donald Trump, Biden dismissed complaints from progressives that the Fed had weakened bank regulation and that oversight of banks was taking into account climate change. Keeping it slow.

Using Powell’s nickname, Biden said, “When our country was bleeding jobs last year, and our financial markets were in panic, Jay’s steady and decisive leadership helped stabilize markets and give our economy a strong foothold.” helped put us on the path of improvement.”

In a second term that begins in February, Powell will face a difficult and high-risk balancing act: Inflation has hit a three-decade high, causing hardship to millions of households, clouding the recovery and reduced the Fed’s mandate to keep prices stable. But with the economy still more than 4 million jobs shy of its pre-pandemic levels, the Fed has yet to fulfill its other mandate of maximizing employment.

Next year, the Fed is widely expected to raise its benchmark interest rate, with pricing in financial markets rising in at least two. If it moves too slowly to raise rates, inflation could accelerate and force the central bank to take more drastic measures to contain it later, potentially causing a recession. can cause. Yet if the Fed raises rates too quickly, it could stifle recruitment and recovery.

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If confirmed, Powell would remain one of the most powerful economic officials in the world. By either raising or lowering its short-term interest rate, the Fed wants to either cool down or encourage growth and recruitment and keep prices stable. Its efforts to direct the largest US economy in the world usually have global consequences.

The Fed’s benchmark rate, which has been pegged at near zero since the pandemic hit the economy in March 2020, impacts a wide range of consumer and business lending costs, including mortgages and credit cards. The Fed also oversees the largest banks in the country.

For months Powell was the favorite to be reappointed, but a vigorous campaign by environmental and public interest groups in support of Brainard has tarnished the picture in recent weeks. Elizabeth Warren, D-Massachusetts, argued that Powell had loosened bank rules after the 2008–2009 financial crisis.

And two other senators opposed Powell last week because they said he was insufficiently committed to using the Fed’s regulatory tools to tackle global warming.

Meanwhile, Brainard cast 20 dissenting votes against changes to financial rules over the past four years. In March 2020, it protested a regulatory change that it said would reduce the amount of reserves needed by large banks to hedge losses. The Fed is speaking out more strongly than Powell on ways to combat global warming.

Biden tried to address those concerns. He said Powell had committed to making climate change a “top priority” and had agreed to ensure “our financial regulations are staying ahead of emerging risks.”

Referring to the 2008 financial crisis, he said at the White House, “Jay, along with the other members of the Fed board, whom I will nominate, must make sure that we never again expose our economy and American families to such risks.” Don’t expose.”

World Nation News Deskhttps://www.worldnationnews.com
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