White House Senior Officials Support Powell's Reappointment as Fed Chair (Update)

Variable is female Brainard

Lael Brainard, Fed Board Member, and Jerome Powell, Fed Chair (right) [Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Reports have emerged that the majority of senior White House officials support the reappointment of Jerome Powell as Chair of the U.S. Federal Reserve (Fed). However, there is also analysis suggesting that if President Joe Biden decides to replace the Chair, female Fed Board member Lael Brainard could be the likely candidate.

Bloomberg News reported on the 21st (local time), citing sources, that among key White House officials, Powell is receiving broad support as the next Fed Chair.

Powell was appointed by former President Donald Trump in 2018, and his term ends in February next year. Whether he will be reappointed is a matter of great interest to the market, as it could significantly impact the Fed’s interest rate normalization process.

CNN also reported that President Biden is facing an important decision regarding Powell’s reappointment, noting that there is ample precedent for following the example of former Presidents Bill Clinton and Barack Obama, who decided to reappoint Fed Chairs Alan Greenspan and Ben Bernanke, respectively, both of whom were appointed by Republican administrations. Since Powell’s monetary policy aligns with the Biden administration, there is analysis suggesting no special reason to replace him.

However, The Wall Street Journal forecasted that although Powell has broad support from the market and Congress, if President Biden accepts the demands of progressive Democrats advocating for stronger financial regulation and Fed-level climate change responses, female Board member Brainard could be nominated as Chair.

Brainard also belongs to the ‘dovish’ camp on monetary policy, similar to Powell. If Powell is reappointed, there would be no need to worry about Republican opposition, but Brainard’s Senate confirmation process may not be easy.

Regarding this, a White House official stated, "President Biden will work carefully with the senior economic team to appoint the Fed Chair in a timely manner and will appoint the most effective candidates for managing monetary policy."

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