President BidenJoe BidenMan sentenced to nearly four years for running scam Trump, Biden PACs Dole in final column: 'Too many of us have sacrificed too much' Meadows says Trump's blood oxygen level was dangerously low when he had COVID-19 MORE said Monday he will nominate Federal Reserve Chair Jerome PowellJerome PowellBiden's proposals spark phase 2 of supply chain crisis Biden's policies to blame for much of current supply chain crisis Powell, Yellen say they underestimated inflation and supply snarls MORE for another term leading the central bank and tap Fed Governor Lael Brainard to serve as vice chair of the Fed board.
Powell, a Republican, has chaired the Fed board of governors since 2018 and enjoys support within both parties. He was appointed to lead the bank by former President TrumpDonald TrumpMan sentenced to nearly four years for running scam Trump, Biden PACs Meadows says Trump's blood oxygen level was dangerously low when he had COVID-19 Trump endorses David Perdue in Georgia's governor race MORE five years after he was first nominated to the Fed board by former President ObamaBarack Hussein ObamaThe Memo: Biden, bruised by Afghanistan, faces a critical test in Ukraine Is the US capable of thinking strategically? Juan Williams: GOP infighting is a gift for Democrats MORE.
Brainard, the only Democrat on the Fed board, was the favorite choice of Powell’s liberal critics and the clear frontrunner to succeed him if Biden opted against renomination. Instead, she is on track to replace Fed Vice Chair Richard Clarida — another Trump-appointed Republican — when his term as the bank’s No. 2 expires in January.
In a Monday statement, Biden cited Powell and Brainard's roles in leading the Fed's response to the COVID-19 recession and their shared focus on "keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before."
"If we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve – and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs," Biden said.
Biden had been mulling for several weeks whether to renominate Powell—who is aligned with most, but not all of the president's economic agenda — or Brainard, a veteran of the Clinton and Obama administrations who has called for the Fed to be more aggressive against financial risks.
Though Powell and Brainard have differing views on financial regulation and the Fed’s role in climate change, both are in sync with Biden’s views on employment and inflation. Each has pushed the Fed toward a closer focus on fostering a strong job market and a slightly higher tolerance for inflation.
Powell was considered likely to be renominated given his broad bipartisan support and his unique position as a Republican in favor of easier monetary policy. Though the Fed chair's record on financial regulation has cost him the support of some progressive lawmakers, many liberal economic veterans urged Biden to renominate Powell as both the economy and central bank faced crucial tests.
"The steady leadership of Chair Powell and the Federal Reserve helped ensure that America’s economy was able to recover from a once-in-a-generation health and economic crisis," said Treasury Secretary Janet YellenJanet Louise YellenOn The Money — Build Back Better takes a 'Byrd Bath' Schumer steps on the gas to move Biden agenda Hoyer says Dec. 15 is drop-dead deadline to hike debt ceiling MORE, who chaired the Fed from 2014-18 and was said to support Powell's renomination.
"Chair Powell has provided strong leadership at the Federal Reserve to effectively meet and address unexpected economic and financial challenges, and I am pleased our economy will continue to benefit from his stewardship," she continued.
Yellen also said she was "grateful" for Brainard's pending promotion, calling her a "respected economist" who "has been instrumental in the nation’s recovery."
Powell should face little trouble locking up another term in an evenly divided Senate. A GOP-controlled Senate confirmed Powell by an 84-13 vote in 2018, and the Fed chief will only need 50 votes to be confirmed again.
Sen. Sherrod BrownSherrod Campbell BrownSenate race in Ohio poses crucial test for Democrats Powell says Fed will consider faster taper amid surging inflation Biden faces new pressure from climate groups after Powell pick MORE (D-Ohio), chairman of the Senate Banking Committee, suggested he would support another term for Powell in a statement following Biden's announcement.
"Powell has led our economy through a historic pandemic, and under his and President Biden’s leadership, unemployment has fallen and workers are seeing increased bargaining power," Brown said.
"I look forward to working with Powell to stand up to Wall Street and stand up for workers, so that they share in the prosperity they create."
Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyBlack women look to build upon gains in coming elections Watch live: GOP senators present new infrastructure proposal Sasse rebuked by Nebraska Republican Party over impeachment vote MORE (R-Pa.), the top Republican on the Banking panel, also said he would support Powell despite concern over the Fed's handling of inflation.
“While I have strongly disagreed with Chairman Powell’s decision to continue the Fed’s emergency accommodative monetary policy—long after the economic emergency had passed—Chairman Powell’s recent comments give me confidence that he recognizes the risks of higher and more persistent inflation and is willing to act accordingly to control it," Toomey said.
Brainard is also likely to be confirmed thanks to her deep ties and enduring support among Democratic lawmakers, but may see little support from Republicans in an increasingly polarized Senate.
“While I have concerns about regulatory policies that Governor Brainard would support as Vice Chair for Supervision, I look forward to meeting with her to discuss these and other matters," Toomey said, opening the door to supporting her.
Biden was expected to renominate Powell, but faced intense pressure from progressive lawmakers and liberal activist groups to replace him with Brainard. Powell's liberal critics argued that his support for loosening some financial rules and his more measured approach to climate-related financial risk undermines any potential benefit from his monetary policy.
Under Powell, the Fed loosened several key bank regulations imposed under the 2010 Dodd-Frank Wall Street reform law, all of which were opposed by Brainard. The Fed has also begun to study the risks climate change poses to the financial system and how banks should account for those dangers, but Powell has ruled out stronger measures meant to divert capital away from fossil fuels.
Some progressive senators and climate activist groups urged Biden to replace Powell with a Fed chair who would plunge the bank into the fight against climate change, though did not specifically endorse Brainard.
Though Brainard has staunchly supported a climate stress testing regime for banks, she has not explicitly called for the Fed to penalize banks that fund or finance carbon emissions and her support among climate hawks was based largely on her Democratic affiliation.
Biden said both Powell and Brainard "share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system."
Updated at 10:18 a.m.