Biden nominates Jerome Powell to stay as Fed chair despite progressive opposition

White House announcement is latest blow to party’s left wing dealt by Biden

President Joe Biden announced the nomination of Jerome Powell to continue his tenure as chair of the Federal Reserve, a move that was opposed by progressives who fear he is opposing more significant oversight of the US banking system.

The White House released a statement confirming that Mr Powell’s nomination to serve again as chair had been sent to the Senate. The decision comes after weeks of criticism from progressives and a public vow from Sen Elizabeth Warren to oppose his nomination.

Lael Brainard is being nominated as the agency’s vice chair.

“I’m confident that Chair Powell and Dr Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before,” said Mr Biden in a statement.

The move will likely be opposed by at least a handful of Senate progressives, though whether it will be enough to block the nomination is in question. Five senators, including Sen Bernie Sanders and four Republicans, opposed Mr Powell’s nomination to the chairman’s role in 2018.

Sen Warren, one of the party’s most prominent left-wingers, told Mr Powell to his face at a Senate hearing that she would vote against his renomination.

“Your record gives me grave concerns. Over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination,” she said.

On Monday, she reiterated that opposition in a statement making clear that the president could count on her vote against Mr Powell’s confirmation.

My statement on the Federal Reserve nominations: pic.twitter.com/W8FgAJdj2e

— Elizabeth Warren (@SenWarren) November 22, 2021

While this many defections from the party’s left wing would normally doom a nominee, the White House can likely expect some Republican support for confirming Mr Powell’s nomination.

Indeed, a number of Republicans were already cheering Mr Powell’s renomination as of Monday morning, reminding many analysts that much of their support for Mr Powell could more accurately be described as opposition to Dr Brainard, whom Mr Biden was also considering for the role before instead choosing as the agency’s vice chair on Monday.

“While I have strongly disagreed with Chairman Powell’s decision to continue the Fed’s emergency accommodative monetary policy — long after the economic emergency had passed — Chairman Powell’s recent comments give me confidence that he recognizes the risks of higher and more persistent inflation and is willing to act accordingly to control it. I look forward to supporting his confirmation,” said Sen Pat Toomey.

“While I have concerns about regulatory policies that Governor Brainard would support as Vice Chair, I look forward to meeting with her to discuss these and other matters,” added Mr Toomey.

Mr Powell was originally appointed to the Federal Reserve’s board under former President Barack Obama. He was then elevated to the position of chair four years later, under former President Donald Trump.

Monday’s decision follows just a few days after a pair of Democratic senators, Sens Jeff Merkley and Sheldon Whitehouse, stated that they opposed Mr Powell’s nomination too.

“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. That person is not Jerome Powell,” they said.

The Independent has reached out for comment from the White House on opposition to his nomination from Mr Biden’s own party.