WASHINGTON–Credit unions may now have a clearer understanding of the future of rates after President Biden said he intends to nominate Jerome Powell for a second term as chairman of the Federal Reserve.
Powell said he also intends to nominate Lael Brainard to serve as the Fed’s vice chair.
Both nominations still require approval by the Senate. Powell has had support from Republicans and moderate Democrats. But he also has his detractors.
Sen. Elizabeth Warren (D-MA) said during a recent Senate hearing that Powell was a "dangerous man to head up the Fed" and that he has "regularly voted to deregulate Wall Street." She further stated a Republican majority at the Fed under Powell's leadership could "drive this economy over a financial cliff again."
In the leadup to the nomination there had been considerable discussion around whether Biden intended to nominate Powell, a Republican whosefour-year term is up in February, or nominate a Democrat as many in his party have demanded.
The choice of Fed chair has also received additional scrutiny as inflation remains high and there is new debate over when the Fed should move to raise rates.
‘Steady Leadership’ Cited
In announcing Powell’s nomination, the White House issued a statement citing Powell's "steady leadership" during the pandemic as reason for the move.
The economic recovery, the White House said, is a “testament to the success of the President’s economic agenda, and it is a testament to decisive action by Chair Powell and the Federal Reserve to cushion the impact of the pandemic and get America’s economy back on track.”
Nominees’ Statements
Following their nominations, both Powell and Brainard issued statements (both of which have been edited for length):
Jerome Powell: “Mr. President, thank you for this extraordinary opportunity to continue to serve the American people. If confirmed by the Senate, I pledge to do everything within my power to meet the responsibilities that Congress has entrusted to the Federal Reserve.
“When COVID hit our shores, American families and businesses were ten years into a historic economic expansion, with a robust jobs market that was reaching even those who had traditionally been left out. The pandemic, however, brought an immediate and painful recession.
“Fortunately, American resilience, along with strong policy actions and vaccines that enabled the economy's reopening, cushioned the blows and set the stage for a strong recovery. Today, the economy is expanding at its fastest pace in many years, carrying the promise of a return to maximum employment.
“Challenges and opportunities remain, as always. The unprecedented reopening of the economy, along with the continuing effects of the pandemic, led to supply and demand imbalances, bottlenecks, and a burst of inflation. 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. We will use our tools both to support the economy and a strong labor market, and to prevent higher inflation from becoming entrenched.
“Other key priorities include vigilantly guarding the resilience and stability of the financial system, addressing evolving risks from climate change and cyber-attacks, and facilitating the modernization of the payments system while protecting consumers.”
Lael Brainard: “Mr. President, I am deeply honored that you are entrusting me with this responsibility at a critical time. I am committed to putting working Americans at the center of my efforts at the Federal Reserve. This means getting inflation down at a time when people are focused on their jobs and how far their paychecks will go. It means supporting a growing economy that includes everyone. It means ensuring that financial markets are thriving and resilient, and the economy is sustainable for future generations. It means serving all Americans in every community across the country, and ensuring the Federal Reserve reflects the diversity of the communities we serve.
“I was privileged to work with Chair Powell as we made every effort to protect workers, businesses, and families from the COVID financial shock, with the support of Congress, and I look forward to working with him in the months and years ahead to build a durable recovery. I want to thank Secretary Yellen with whom I have also been privileged to work. I am grateful to the many people who have supported my efforts. As a working mom, I am especially grateful for the love and support of my three daughters, my husband, my sisters, and my mother.”