Progressive lawmakers have made an 11-hour effort to convince America’s Joe Biden to reject Jay Powell for a second term as Federal Reserve chair, as the US President prepares to make a decision before Thanksgiving. Who will lead the central bank?
Democratic senators Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon urged Biden not to reappoint Powell, citing the current Fed chair’s stance on climate-related risks and the capacity of the US central bank to engage more closely in those matters.
“Jerome Powell refuses to recognize climate change as an urgent and systemic economic threat,” they wrote in a statement Friday.
“President Biden must appoint a Fed chair who will ensure the Fed does its job of protecting our financial system and shares the administration’s view that fighting climate change is everyone’s responsibility. Policymakers. That person is not Jerome Powell.”
The senators took issue with Powell’s previous remark that climate change “is really an issue that gets assigned to a lot of other government agencies, not the Fed too much,” and that the Fed did not and do not “seek to be climate policymakers”.
The senators’ statement represents the latest attempt by progressives to convince the Biden administration to choose new leadership for the Fed. Fed Governor Lael Brainard has emerged as Powell’s closest rival, receiving acclaim for taking a more proactive stance on how the Fed should engage on climate-related issues and rolling back efforts in office. Powell’s move to loosen rules governing the largest and most important U.S. financial institutions.
Elizabeth Warren, a progressive Democratic senator from Massachusetts, publicly voiced her objections to Powell in September, calling him “dangerous man“For his regulatory records.
The Biden administration on Thursday said it would make a decision before Thanksgiving. In recent weeks, the window for an announcement has slid several times, suggesting a tight race between the two top contenders.
Powell remains a favorite, not least for his success in helping rescue the US economy and financial markets from the brink when the global pandemic broke out last year, and meet Biden in the first day of this month. On the same day, the president met privately with Brainard, who has served in his role since 2014 and has twice been considered a leading candidate to lead the Treasury Department.
While Brainard enjoys the support of progressive Democrats, Powell, a Republican who was tapped by Donald Trump in 2017 for the role, has significant bipartisan support and there will likely be a much faster confirmation process.
Whoever Biden chooses will face the problem Inflation soars, which surprised both the Fed and the White House with its importance and persistence. The Fed has started shrink Their asset-buying program plans to end the stimulus by mid-2022. Whether a rate hike is followed shortly thereafter is a decision the next Fed chair will need to make.
