President Joe Biden announced Monday that he will nominate Federal Reserve Chairman Jerome Powell to a second term, as his first comes to an end in February 2022. Biden also announced his intent to nominate Fed Gov. Lael Brainard – a member of the Fed since 2014 and former Treasury secretary – as vice chair of the Board of Governors of the Federal Reserve System. Brainard is the only Democrat currently on the Fed’s Board of Governors.
The nomination serves as a vote of confidence in Powell and in the Fed’s monetary policy response to the economic effects of the COVID-19 pandemic.
“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again,” Biden said in a statement. “That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery.
“As I’ve said before, we can’t just return to where we were before the pandemic, we need to build our economy back better, and I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before,” he said.
The Fed will likely continue its current interest rate trajectory with Powell in charge, meaning that it could begin raising the federal funds rate in 2022. As a result, interest rates will be pushed higher, but you can take advantage of low rates now by refinancing your mortgage. Doing so can potentially save you hundreds of dollars on your monthly payment, too. Visit Credible to compare multiple lenders at once and see how much you could save.
Confirmation of Fed positions go to Senate
Biden’s nominations will now head to the Senate, where they are expected to pass. In 2018, Powell was confirmed in a bipartisan vote with 84 Senators voting yes to his nomination. Notably, Vice President Kamala Harris, then serving as senator of California, voted no to his nomination in 2018.
Powell could face opposition in the Senate from progressives who say he hasn’t been aggressive enough on climate change, according to a statement released by Sens. Sheldon Whitehouse (D-R.I) and Jeff Merkley (D-Ore.).
“President Biden must appoint a Fed Chair who will ensure the Fed is fulfilling its mandate to safeguard our financial system and shares the administration’s view that fighting climate change is the responsibility of every policymaker. That person is not Jerome Powell,” the statement said.
The White House credited the 5.6 million jobs gained during the economic recovery and unemployment drop by 4.6% – two years faster than projected – to Biden’s policies and Powell’s “steady” leadership.
With Powell likely to serve a second term after a confirmation by the Senate, the Central Bank is likely to continue on its current course to raise interest rates next year. You can take advantage of low rates now by taking out a personal loan to consolidate high-interest debt. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
What to expect from interest rates in 2022
Interest rates are expected to rise in the coming year as the Fed begins tapering its economic stimulus and looks to begin raising rates. The Fed currently projects it will raise rates next year for the first time since the coronavirus pandemic began.
President Biden said he is confident in Powell and Brainard’s leadership to emerge from the pandemic.
“Fundamentally, if we want to continue to build 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 the strong leadership our country needs,” Biden said.