Biden Gives Powell a Second Term as Fed Chair
Biden Applauds Powell’s COVID-19 Actions
President Biden nominated Jerome Powell to a second term as chair of the Federal Reserve. Powell was the chair all through the COVID-19 pandemic, rolling out unprecedented stimulus to keep the US economy afloat.
Before the announcement, there had been talk that Biden might nominate Fed Governor Lael Brainard. Instead, Brainard was named vice-chair of the board of governors, giving her oversight over a variety of Fed policies.
When announcing Powell’s nomination, Biden pointed to his actions in the early days of the pandemic including cutting interest rates close to zero, buying back over $4 trillion in bonds, and launching several lending programs. Powell’s nomination will now go to the Senate for confirmation.
Staying the Course
Powell’s nomination has bipartisan support and is expected to pass in the Senate. The decision to keep Powell at the helm of the Fed is part of Biden’s aim to maintain stability during a time of economic uncertainty. The supply-chain issues have not abated, and prices for everything from food to gas are skyrocketing.
Markets React Favorably to Nomination
Wall Street seemed pleased with the Powell nomination as it takes some of the uncertainty out of the equation. Investors are paying close attention to the Fed’s plans for unwinding its pandemic bond-buying program. They are also wondering when the central bank may raise interest rates.
The Fed already indicated it plans to end its bond-buying program by late spring or early summer. Fed officials have also said they will not raise interest rates until the tapering is complete, but these plans could change depending on the strength of the labor market and inflation trends. Though uncertainty still looms, Biden’s decision to nominate Powell for a second term as Fed chair was reassuring for investors.
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