Biden Will Keep Jerome Powell as Federal Reserve Chair

Mr. Powell, who appeared alongside the president and Ms. Brainard at the White House, acknowledged the stakes. “We know that high inflation takes a toll on families, especially those less able to meet the higher costs of essentials like food, housing and transportation,” he said, adding that the Fed would “use our tools both to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched.”

Mr. Powell’s reappointment suggests that the White House, which has a chance to fully reshape the Fed, is not aiming to completely overhaul the institution. The Biden administration already has one vacant governor role to fill, and two more seats will open early next year, giving Mr. Biden room to appoint at least three of seven governors. The president must also fill several leadership roles, including the Fed’s vice chair for supervision, a powerful position given its influence on bank oversight.

Mr. Biden has been under pressure from progressives and moderate Democrats to pick a diverse slate of leaders for the Fed who would prioritize tough bank regulation and do what they could to address climate change risks in the financial system.

Mr. Powell has come under criticism for being slow to address climate change and for backing measures that have chipped away at some post-crisis financial rules. In his statement on Monday, Mr. Biden said that he expected Mr. Powell, along with Ms. Brainard, to “address the economic risks posed by climate change and stay ahead of emerging risks in our financial system.”

Whether that will be enough to appease Mr. Powell’s critics remains to be seen. The Fed chair’s tenure has been criticized by some progressives, including Senator Elizabeth Warren of Massachusetts, who has called Mr. Powell “a dangerous man.” On Friday, Senator Sheldon Whitehouse of Rhode Island and Senator Jeff Merkley of Oregon released a statement opposing Mr. Powell’s reappointment.

In a statement on Monday, Mr. Whitehouse said that he was “disappointed” in Mr. Biden’s decision, saying that Mr. Powell had not taken climate change seriously enough.

“I sincerely hope that, if confirmed, Powell will reassess his past opposition to utilizing the Fed’s regulatory tools to minimize climate-related risks to the financial sector,” he said.

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