Joe Biden reappointed Jerome Powell, 68, to a second four-year term as President of the U.S. Federal Reserve effective 1is February 2022. The task of the president of the Fed is immense: this moderate Republican will have to steer the return to normalcy of the American economy, while inflation reached 6.2% in October, a first for thirty years. This subject has become a major political issue in the United States and plagues the Biden presidency, one year before the midterm elections. “We know it is hard for families to cope with the rising prices of gasoline, food, shelter and other essentials”, said Monday, November 22, President Biden in the company of Mr. Powell at the White House, ensuring that the phenomenon was “Global”.
This need for stability is one of the reasons why the Democratic president resisted the calls of progressive senators, such the senator of Massachusetts Elizabeth Warren, who had announced that she would vote against the reappointment of Mr. Powell: she called him d ‘man “Dangerous” due to the relaxation of supervision of banks.
The president gave the senator a semi-satisfaction since he chose to promote to the post of vice president of the Fed, Lael Brainard, 59, a Democratic economist appointed in 2014 under Barack Obama to the board of governors.
At the end of 2017, Donald Trump had broken with the tradition which wanted since Ronald Reagan (1981-1989) that a new president of the United States does not change the president of the Fed: he had chosen Mr. Powell, to the detriment of Janet Yellen , a Democrat specializing in work, who has since become Joe Biden’s Treasury secretary.
Objective of price stability and employment
Mr. Biden was slow to announce his choice because of divisions within the Democratic Party, which fails to definitively adopt the social and environmental aspect of its plan to rebuild the United States (Build Back Better). To rename Powell was to risk angering the left wing of the party and losing vital votes. Choosing Brainard was alienating the voices of centrist senators, who want a return to minimal orthodoxy. The confirmation from Mr Powell, who in 2018 received the support of 84 out of 100 senators, should not be a problem. “At this time, with both uncertainty and major potentials for our economy, we need stability and independence at the Federal Reserve”Biden said to justify Republican Powell’s reappointment, insisting on the need for cross-party agreements.
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