Biden gives Fed's Powell nod for second term

BIDEN: “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.”

U.S. President Joe Biden nominated Federal Reserve Chair Jerome Powell for a second four-year term on Monday, positioning the former investment banker to finish guiding the economy out of the health crisis.

Lael Brainard, the Fed board member who was Biden’s other top candidate for the job, was tapped as vice chair.

Sixty-eight year-old Powell and 59-year-old Brainard are both monetary policy veterans and collaborators on a recent overhaul of Fed policy, which shifted the Fed’s emphasis to jobs from the focus on inflation.

But progressive groups, eager for the Fed to reverse its Wall Street-friendly stance, criticized Biden’s decision to keep around the chair picked by his Republican predecessor – Donald Trump.

Biden said it was the right choice:

"In the last administration, he stood up to unprecedented political interference and in doing so, successfully maintained the integrity and credibility of this institution… “

Powell’s swift and aggressive actions at the start of 2020’s health crisis were widely hailed as staving off a potential Depression.

But now - the current recovery has produced risks of persistent inflation.

Powell said he knows the dangers:

“We know that high inflation takes a toll on families, especially those less able to meet the higher costs of essentials.”

Powell's second term would begin in early February, and the coming months will be crucial in determining his legacy, said Hilary Kramer of Hilary Kramer Investment Research:

"Jerome Powell was a real dove when the times were the worst. Now we still need him but let’s see if we can do the hard part which is going against the grain, making many people angry because we are going to have to totally stop tapering and we are going to have to raise rates – inflation is out of control.”

Powell and Brainard will both need to be confirmed by the closely-divided Senate.

An aide to Senate Republican leader Mitch McConnell on Monday said he’s expected to support Powell as Fed chair.