Jerome Powell set to retain US Federal Reserve chairmanship

Appointed by Donald Trump, reappointed by Joe Biden. The Democratic President has decided to renew Jerome Powell’s term as President of the US Federal Reserve (Fed). For her part, Lael Brainard, the institution’s only Democratic governor – she was its main competitor and its main competitor – becomes vice-president. But his profile was much less consensual. His positions in favor, in particular, of stricter banking and financial regulation, could have cost him his approval by the Senate, a failure that Joe Biden could not afford.

Action during the pandemic hailed by Joe Biden

« Jay [Jerome] is the right person to guide us and continue this effort ”, said the US president in a speech, referring to the rebound in the economy and jobs, brought down last year by the Covid-19 pandemic. The president also praised the” independence “ of the boss of the most powerful world bank and the fact that his support comes from “The whole political spectrum”. “Where Jay and Lael bring continuity and stability to the Fed, my other choices will bring new perspectives and new voices.”, promised the US president, who was speaking from the White House, alongside Jerome Powell and Lael Brainard.

In a statement released earlier today, the White House welcomed “The decisive action of President Powell and the Federal Reserve to cushion the impact of the pandemic and get the US economy back on track”. “President Powell has provided continued leadership during an unprecedented difficult time”, while « Lael Brainard one of the main macroeconomists of our country played a key role at the Federal Reserve, working with Powell to help fuel our country’s strong economic recovery ”, is it specified.

“While there is still a long way to go, we have made remarkable progress over the past ten months to get Americans back to work and get our economy going.”Joe Biden said in comments emailed to reporters. “This success is testament to the economic program that I have implemented and the determined action taken by the Federal Reserve”, added the White House.

This decision by the White House was eagerly awaited and delicate for Joe Biden, who is in the midst of negotiations in Congress on his investment plans. This choice is, in terms of economy, one of the most important decisions of the mandate of the President of the United States.

Appointed by Donald Trump, who does not spare him

Jerome Powell, in a short intervention, detailed his roadmap as follows: “We will use our tools both to support the economy and a strong labor market, and to prevent high inflation from taking hold. “

Before becoming central bank boss, Jerome Powell, 68, was a researcher at the Bipartisan Policy Center think tank. A native of Washington, this lawyer by profession is a former partner from 1997 to 2005 of the American mega-fund Carlyle. This moderate Republican is also one of the richest people to ever run the Fed. During his confirmation hearings in 2018, he had thus revealed a fortune of between 18 and 55 million dollars.

During his tenure, Donald Trump trampled on the tradition of respect for the independence of the central bank, almost daily targeting the Fed and its president through scathing tweets, going so far as to publicly thunder that he regrets having it. appointed.

Jerome Powell has nevertheless benefited from the support of Janet Yellen, his predecessor and current US Secretary of the Treasury, with whom he shares the desire to ensure more equitable growth and reduce the inequalities affecting black and Hispanic minorities. His second term, which begins next February, promises to be full of challenges: unemployment among African Americans still stands at nearly double that of white people, a disparity that Jay Powell never fails to mention in his appearances. public. The other big challenge for his mandate is to raise rates at the right time so as not to jeopardize the recovery.

His appointment must now be confirmed in the Senate, first by the banking committee and then in plenary session. It should have enough support that it can remain number one for the Fed. Some elected members of the left wing of the Democrats have, however, announced that they will not give him their votes, deeming his action too timid on climate change.

Le Monde with AFP and Reuters

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Jerome Powell set to retain US Federal Reserve chairmanship

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