Biden begins making his mark on Fed

(Nov. 24, 2021) Leadership at the Federal Reserve would be solidified at least through 2026 if President Joe Biden’s (D) nominations for chair and vice chair of the board, made Monday, are confirmed by the Senate.

Nominated for a four-year term as chair, and a new four-year term for vice chair, Biden tapped Jerome H. (“Jay”) Powell and Lael Brainard to take the two top spots. Biden referred to “decisive action” taken by the pair in helping to steer the nation through the financial impact of the coronavirus crisis and put the economy on the path to recovery.

The president is apparently not done making appointments: the White House indicated that he intends to nominate candidates for three open slots on the Fed Board beginning in December, including that of vice chair of supervision for the agency.

The supervision vice chair appointment has been empty since last month, when the term of Randal Quarles in that job ran out after four years. Quarles has since announced his intention to the leave the Fed Board by the end of next month.

Meanwhile, the term of the current Fed Vice Chairman Richard Clarida (in both that position and as a member of the board) expires in February. Monday’s statement from the White House indicated nothing about keeping Clarida on the board. That position will be one of the three Biden will have to fill, the other two being Quarles’ and a board slot that is now vacant.

Biden said the focus of both Powell and Brainard will be on keeping inflation low, prices stable and “delivering full employment will make our economy stronger than ever before.” He asserted that both share his “deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system.”

“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve – and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” he said.

Powell was confirmed by the Senate for a four-year term as chair of the seven-member board in 2018 after being nominated by then-President Donald Trump (R). His term in that role ends officially in February; his term as a Fed Board member runs to January 2028.

Brainard has served on the Fed Board since June 2014 after being nominated by then-President Barack Obama (D); her terms runs until January 2026. While at the Fed, she has been involved in several key issues related to financial institution regulation. Those include: being the Fed’s point person on reform of rules implementing anti-redlining laws (the Community Reinvestment Act (CRA)) and leading the Fed’s efforts in developing a 24-hour, seven-days-a-week payments system (known as FedNow), expected to debut in 2023.

If confirmed, Powell and Brainard would serve terms as chair and vice chair that end in 2026.


President Biden Nominates Jerome Powell to Serve as Chair of the Federal Reserve, Dr. Lael Brainard to Serve as Vice Chair