July 16, 2024

Biden Will Keep Jerome Powell as Federal Reserve Chair

That included Senator Elizabeth Warren, who had called Mr. Powell “a dangerous man,” and suggested she would not support his renomination during a testy hearing in late September. Mr. Biden met with Ms. Warren on Nov. 9 in the Oval Office to discuss Fed appointments and called her last Thursday, before he had settled on a pick, according to a person with knowledge of the discussions.

On Friday, Mr. Biden called Mr. Powell and Ms. Brainard to inform them that he had made his choice. The decision was influenced in large part by Mr. Biden’s belief that he and Mr. Powell are philosophically aligned when it comes to keeping interest rates low and continuing to support the economy until more people are working and wages are rising.

On Monday, Mr. Biden said he believed the Fed had more work to do to get to “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,” he said.

Yet some economists, and many Republicans, say the Fed runs the risk of allowing inflation to spin out of control if it does not start to pull back efforts to fuel economic growth, with workers demanding increasingly higher wage increases to cover rising costs, resulting in 1970s-style inflation.

Mr. Biden has been suffering politically as prices rise for food, gas and airplane tickets. The president has repeatedly tried to reassure Americans that his economic policies will ultimately calm inflation, a message he is expected to repeat during remarks on Tuesday.

But his larger economic agenda has become tangled in the politics of price increases, particularly as the president pushes Senate Democrats to coalesce around a $2.2 trillion climate change and social policy bill that Mr. Biden says will ease inflationary pressures in years to come but Republicans warn will stoke higher prices immediately.

Mr. Biden said he was certain that both Mr. Powell and Ms. Brainard would work to stabilize inflation and keep the economic recovery on track.

Article source: https://www.nytimes.com/2021/11/22/business/economy/fed-chair-jerome-powell-biden.html

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