Powell, a Republican, is backed by Biden to remain post-pandemic Fed chairman

He was named after Donald Trump, who later criticized him. Jerome Powell, was backed by Joe Biden to continue four more years at the helm of the US Federal Reserve (Fed), remained stoic in the face of questions and went through one of the worst crises in the history of the United States.

Biden He decided to renew his mandate despite pressure from the left wing of his Democratic Party who preferred a candidate closer to his ideas.

His name must be confirmed by the Senate.

At age 68, this former investment banker, a moderate Republican who is not an economist by training, received in particular the endorsement of Janet Yellen, his predecessor to whom Trump did not renew the mandate, breaking a tradition. With the current Secretary of the Treasury, he shares the desire to guarantee more equitable growth and reduce the inequality that affects black and Hispanic minorities.

After arriving at the Fed in 2018, “Jay” Powell, who was a senior Treasury official under the presidency of George Bush and became governor of the Fed with Barack Obama, had to deal with the pandemic.

Now, when inflation is closely followed in the United States and prices rise, the Fed, under the mandate of its sixteenth president, will begin to reduce its stimuli to the economy, starting with the purchases of assets that together with the rates of Ultra-low interest rates were part of the arsenal against the coronavirus crisis.

Stoics

Trump He came to publicly regret having appointed him to the head of the Fed.

Powell he refrains from comment on the matter in his very rare media appearances and at the press conferences he customarily follows after each monetary committee meeting.

In 2019, when the trade war with China was at its peak, the economy slowed down, and the Fed reversed its policy of rate hikes that began in 2018.

Interest rates were practically zero, and the pandemic arrived.

Powell understand then that there is not a minute to lose.

The 2020 recession was the worst since World War II. But the Fed and its president managed to limit the damage and calm the financial markets.

The agency implemented new credit facilities and a massive program of purchases of Treasury bonds and other securities to ensure the flow of funds to the US financial system.

These efforts, as well as trillions of dollars in reactivation spending from the federal government, prevented a more severe and lasting recession.

Focus on minorities

The unemployment rate fell to 4.6% in October, above the pre-pandemic level of 3.5%, but far from the 14.8% registered in April 2020.

For some politicians and economists, the Fed’s decisions under Powell could lead to an overheating of the economy and lasting inflation.

After languishing for years below the central bank’s 2% target, inflation stood at 6.2% in 12 months in October, a level unprecedented in 30 years.

Officials at the Fed insist that this is a peak due to temporary factors.

The second term of Powell, which will begin next February, is announced loaded with challenges, particularly in terms of minority inclusion.

Unemployment among black Americans is still more than double that among whites, a disparity Powell always mentions in his public appearances.

The other technical challenge is when to raise interest rates at the right time so as not to compromise the reactivation.

Before the Fed, Powell He was a researcher at the bipartisan think tank Bipartisan Policy Center.

A native of Washington, he is a lawyer. A former partner from 1997 to 2005 of the giant US investment fund Carlyle, he is one of the richest people to have run the central bank.

At his confirmation hearings in 2018, he declared a fortune of $ 18 million to $ 55 million.