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Jerome Powell Tapped For Second Fed Chair Term

   DailyWire.com
Graeme Jennings-Pool/Getty Images

President Biden nominated Jerome Powell for a second term as Federal Reserve chair.

Powell, originally selected as Fed chair by President Donald Trump in 2018, led the central bank through its policy response to COVID-19 and the lockdown-induced recession — namely, by enacting near-zero interest rates and $120 billion in monthly asset purchases.

President Biden said on Monday afternoon:

… I’m nominating Jerome Powell for a second term as Chair of the Federal Reserve …

When our country was hemorrhaging jobs last year and there was panic in our financial markets, Jay’s steady and decisive leadership helped to stabilize markets and put our economy on track to a robust recovery.

Jay is a believer in the benefits of what economists call “maximum employment.”  That’s an economy where companies have to compete to attract workers instead of workers competing with each other for jobs, where American workers get steady wage increases after decades of stagnation, and where the benefits of economic growth are broadly shared by everyone in the country, not just concentrated for those at the top.

Biden also tapped Lael Brainard — who served as Under Secretary of the Treasury for International Affairs during the Obama administration and is currently a member of the Fed’s Board of Governors — as vice chairwoman of the Board.

The Wall Street Journal explains:

A vocal minority of progressive groups pressed Mr. Biden to replace Mr. Powell with someone more committed to aggressive bank regulation and to using the central bank’s supervisory powers to address climate change. Some of them favored Ms. Brainard, an economist named to the board by Mr. Obama in 2014. She supported Mr. Powell’s monetary policy decisions while dissenting on moves to ease certain banking regulations…

Elevating Ms. Brainard to vice chairwoman represents a compromise of sorts between the two camps. The vice chair of the board, together with the New York Fed president, traditionally serve as the Fed chair’s top lieutenants in designing monetary policy. If confirmed, Ms. Brainard could take over as vice chairwoman next February.

After repeatedly hinting at a taper in quantitative easing, Fed officials announced that they would cut bond purchases by $15 billion in both November and December.

“The Federal Reserve’s ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” said the Federal Open Market Committee.

Two months ago, Powell ordered an ethics review after top officials made large trades at the height of the recession. Federal Reserve Bank of Dallas President Robert Kaplan made multimillion-dollar deals involving shares of Apple, Amazon, Boeing, and Facebook; Richmond Fed President Thomas Barkin and Boston Fed President Eric Rosengren also held significant financial assets, with the latter holding shares of Pfizer, AT&T, and Chevron.

As a result of the review, the Fed barred senior officials from purchasing individual securities.

“To help guard against even the appearance of any conflict of interest in the timing of investment decisions, policymakers and senior staff generally will be required to provide 45 days’ advance notice for purchases and sales of securities, obtain prior approval for purchases and sales of securities, and hold investments for at least one year,” explained a statement from the central bank. “Further, no purchases or sales will be allowed during periods of heightened financial market stress.”

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