Powell, head to head to stay at the head of the Fed against Lael Brainard

The two potential candidates to head the Federal Reserve (Fed), current chairman Jerome Powell and Lael Brainard, appear to be head-to-head and all eyes are on Joe Biden, who will make the final decision, perhaps this one. same week.

The election of the president, who must choose between the governors of the institution, must then be approved by the Senate.

The current head of the Fed could get a second four-year term or could be replaced by Brainard, the institution’s only Democratic governor.

According to the US media, both were received on November 4 by Biden, who two days earlier had promised a quick decision.

In the Senate, this election is one more element of debate between the left wing and the more moderate wing of the Democrats.

The decision is “politics, politics, politics”Summarized Jay Bryson, Wells Fargo chief economist.

“What matters is that President Biden chooses someone experienced and credible, ”Treasury Secretary Janet Yellen told CBS on Sunday. “And there are several candidates”He added.

“I already said that I think President Powell did a very good job running the Fed, solving problems, particularly when the pandemic hit.”He repeated on Sunday.

Republican support

Yellen was the first woman to lead the Fed, but she didn’t get a second term because Donald Trump broke that tradition and appointed Powell in her place.

Powell “is considered the favorite”Bryson explained. “If Biden publishes Powell’s name today, the majority of Republican senators will support his nomination. Powell would easily pass the Senate. For Brainard, it’s different”Said the expert.

He wondered if Biden would want to take the “risk” from “a great battle”On the confirmation of his nominee amid negotiations on so many other issues.

The current Fed chairman has support on the right and left of the political spectrum.

The Wall Street Journal, which cites sources close to the discussions, highlighted on Monday that Brainard did “better than expected”In his interview with Biden in early November.

“Outfit” difference

Brainard, who last year ran for Biden’s treasury secretary, is a figure with less consensus. A fervent advocate of stricter banking regulation, she is supported by the most left wing of the Democrats, who also want the Fed more involved in climate change and social justice issues.

She is in favor of low rates and support for the economy. But from the start of the coronavirus crisis, Powell himself was particularly favorable to a moderate policy.

A) Yes, “in terms of monetary policy, the difference is slight between Powell and Brainard”Highlighted Jay Bryson, citing in particular the issue of banking regulation.

In addition to Powell and Brainard, four other governors are currently working in the Fed. Although there is a vacant position that the White House could fill with someone from outside, and that figure will become president of the body.

Two other governors will leave their posts between now and January 2022. Powell’s term ends in February next year. Biden thus has the opportunity to give the Fed a new political color.