In the end, President Joe Biden did what many close to him expected: He took a longer-than-anticipated amount of time to arrive at a reasonable, moderate decision that thrilled few but carried limited risk.
In choosing to renominate Jerome Powell to head the Federal Reserve, President Joe Biden is placing the economic future of his administration largely in the hands of a Republican selected by Donald Trump who made his fortune in private equity and enjoys overwhelming support among GOP lawmakers. Biden passed on an opportunity to put the central bank under the helm of a woman and a Democrat — Fed Governor Lael Brainard — for years to come. Why? In part, people close to Biden say he did it because of Wall Street’s confidence in Powell’s stewardship during the pandemic — the Dow jumped a couple of hundred points on Monday right after the news. And Biden by nature tends to favor incumbents, continuity and bipartisanship. There also wasn’t an overwhelming case to fire Powell, though the scary surge in inflation offered one potential way out. Democrats arguing for change wanted someone tougher on bank regulation, the environment and economic inequality, but there’s little distance between Powell and Brainard on monetary policy, the main focus of a Fed chair. Perhaps the biggest reason of all: The path to confirming Biden’s other finalist, Brainard, a loyal Democrat, looked thorny at best in the face of potentially strong GOP opposition and even some trepidation from moderate Senate Democrats, who favor Powell. In the end, Biden did what many close to him expected: He took a longer-than-anticipated amount of time to arrive at a reasonable, moderate decision that thrilled few but carried limited risk. “The president made a strong statement about the importance of continuity and not injecting additional uncertainty when there is already a lot of it around,” said Jason Furman, a Harvard professor and former top economic adviser to President Barack Obama who has close ties to the Biden White House. “He believes in institutions and likes the idea of there being at least one corner left in Washington that is not incredibly politicized.” In announcing his decision Monday afternoon, flanked by Powell and Brainard, whom Biden chose as Powell’s No.
