United States
President Joe Biden re-nominated Jerome Powell as the chairman of the Federal
Reserve on Monday laying to rest months of speculation over who will lead the
central bank amid the pandemic and ensuing economic crises. President Biden’s
nomination was announced by the White House. Biden also nominated Fed governor
Lael Brainard as vice-chair.

The Federal
Reserve re-nomination comes at a time when consumer prices to a 30-year high.
There is active concern in the economy that prices could remain high and the
current inflation is not transitory. Powell, a Republican who draws great
support GOP, has often been criticised for not being proactive in fighting
rising prices.

“If we want to
continue building 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 strong leadership our country needs,” Joe Biden said in a statement.

Biden’s nomination
will however have to be confirmed by the Senate. If confirmed, Jerome Powell
will continue to be one of the most powerful economic officials in the world.
It will be up to Powell to raise or lower benchmark interest rates to either
cool or stimulate growth and hiring.

Powell’s second
stint as Fed Reserve chief is expected to be more difficult than the first as
Americans struggle to tide through the immense economic impact of the pandemic.
Rising inflation is already biting into the Fed’s resolve to keep prices
stable. Further, with the economy still four million jobs short of the
pre-pandemic level, it is the Fed’s responsibility to work at maximizing employment.

The Fed cannot
move too slowly to raise interest rates as inflation may accelerate further
forcing it to take more draconian steps later on and potentially causing a
recession.