President Joe Biden is expected discuss the economy and combating inflation Tuesday, fueling speculation that he may announce his nomination for the next chair of the Federal Reserve then.
Biden will “deliver remarks on the economy and lowering prices for the American people,” the White House announced Sunday. He will then travel to Nantucket, Massachusetts, where he will spend the Thanksgiving holiday.
The president likely will announce his Fed pick before leaving for his trip.
“The president intends to make a decision,” said Press Secretary Jen Psaki in a press briefing on Friday. “And I expect we’ll have more to share in advance of his departure.”
While current Fed Chair Jerome Powell is considered the frontrunner, Fed Board Gov. Lael Brainard is also considered a possibility. While both have similar views on monetary policy, they do have stark differences on regulatory and political topics. Both candidates have been interviewed by the White House.
Powell is a Republican and a former private-equity executive who took the reins of the Fed in 2018 after being nominated by former President Donald Trump. As Fed chair, he has generally voted in favor of loosening banking regulations, a move that has attracted criticism from progressives. Progressives have also criticized Powell’s stance on the Fed’s role in mitigating climate change.
“President Biden must appoint a Fed chair who will ensure the Fed is fulfilling its mandate to safeguard our financial system and shares the administration’s view that fighting climate change is the responsibility of every policymaker,” progressive Sens. Sheldon Whitehouse (D.-R.I.) and Jeff Merkley (D.-Ore.) said in a statement. “That person is not Jerome Powell.”
Brainard, the sole Democrat on the Fed Board, has been tougher on financial regulation and more open to involve the central bank in climate change policy.
“A lot of our largest banks who are internationally active are already being supervised in other jurisdictions to make sure they are measuring, monitoring and managing climate-related financial risks,” Brainard said in comments at a National Association for Business Economics conference in September. “The U.S. has been behind and we need to catch up.”
Over the weekend, Sen. Jon Tester (D-Mont.) urged Biden to appoint Powell, saying the delay was hampering the Fed’s ability to tackle inflation.
“I think we’ve got issues that revolve around inflation that he can’t do much about as long as he’s not confirmed,” Tester said on “Meet the Press” on Sunday. “He needs to be appointed.”
Tester’s comments reassured markets that a Powell nomination was the most probable outcome, wrote Citigroup analysts in a note.
“Tester highlighted the risk of inflation overshooting and explicitly opposed other potential nominees (which would include Brainard),” they said Monday. “This is a not-so-subtle signal to the administration that it may be difficult to round up the 50 votes required in the Senate for an alternative nominee.”
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