InstaForex

November 5, 2021

Joe Biden has not decided on the name of the new head of the Fed

 In addition to all the twists and turns that the States have fallen into in recent months, the question remains open with the name of the new head of the Fed. Nothing special prevents Jerome Powell from retaining his post, unless, of course, his candidacy is supported by Congress, the Senate, and President Joe Biden personally. However, in the last few months, there have been rumors that Powell will leave the Fed in February next year. Therefore, the name of the proposed new head of the central bank should be announced right now, as it will take time to approve this candidacy. And considering what political battles are currently being observed in both chambers of Congress, it is hardly worth thinking that the vote will take place quietly, calmly, and "like clockwork". Consequently, Joe Biden, who should nominate a candidate for the post of Fed president, needs to hurry. For example, his predecessor Donald Trump announced Powell's candidacy in early November 2017. Thus, Joe Biden is already "late" compared to his colleague. Also now it is even difficult to guess who might replace Powell. There are a lot of rumors, some of them say that the next head of the Fed will be Lael Brainard, who now holds a post on the board. Also, according to rumors, Joe Biden and the Democrats need "their person" at the head of the Fed, so that there will be a few problems with him as possible in the future. Recall that Donald Trump probably regretted the appointment of Jerome Powell more than once, since later he could not agree with him on the most important issues. In particular, by the size of the key rate. Thus, Biden is unlikely to leave a Republican at the head of the Fed but will try to appoint a Democrat.


The US president himself said today that he intends to announce the name of the candidate nominated for the post of head of the Fed in the near future. During the 26th Conference of the UN Framework Convention on Climate Change in Glasgow, Joe Biden was asked if he had decided on a candidate for the position of head of the Federal Reserve, to which he replied that he was not going to discuss this issue at this event, but would announce the name of the applicant in the near future. "I have thought about it a lot and discussed with my economic advisers what candidates we have. We have a lot of good options, but I will announce the name when we are fully confident in our choice," Joe Biden said. It should also be noted that former Fed Chair Janet Yellen, who now holds the post of Finance Minister, supports Jerome Powell's candidacy for a second term. She believes that in recent months the Fed has coped well with its responsibilities and should not change the head of the central bank at present. Perhaps it is assumed that it is Powell who has all the necessary information on how to continue to lead the economy out of the crisis, while the new head may not know all the nuances. Yet the entire pandemic crisis was led by Powell at the head of the Fed.