Biden reappoints Jerome Powell as Federal Reserve chairman President Biden has tapped Jerome Powell to serve a second term as chairman of the Federal Reserve as the economy faces huge challenges, including surging inflation.

Biden reappoints Jerome Powell as Fed chairman at a critical time for the economy

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


President Biden has chosen Jerome Powell to lead the Federal Reserve for another four years. Powell has steered the central bank through the sharpest economic downturn in almost a century, which Biden described as a trial by fire. So he goes on trial again, so to speak. NPR chief economics correspondent Scott Horsley is with us. Scott, good morning.

SCOTT HORSLEY, BYLINE: Good morning, Steve.

INSKEEP: I can't say this is a total surprise, but there was a little bit of suspense. Why stay with Powell?

HORSLEY: Well, Powell earned it in the White House view. In a statement, the administration praised the Fed chairman for his steady leadership during the pandemic, which, as you said, triggered the worst economic downturn since the Great Depression. The Fed acted quickly and aggressively when the pandemic struck to counteract the resulting recession. And that's one reason we've also seen a rapid, albeit uneven, recovery. The White House also praised Powell, who is a Republican, for the way he stood up to attacks from former President Trump who had appointed him and thereby protected the central bank's independence.

Now, there were some progressives who wanted Biden to name a Democrat as Fed chair, and the president did throw a bone in that direction by naming Lael Brainard as vice chair. Brainard currently serves on the Fed's Board of Governors. And she had been sort of the leading alternative to Powell. The administration says both Powell and Brainard share the president's commitment to an economic recovery that works broadly for all workers.

INSKEEP: A kind of a difference between the way that President Trump approached the Fed - he removed Janet Yellen, who had taken over not long before, in an effort to put his own person there. Biden keeps the existing chair there in a way that can be cast, I guess, as nonpartisan. How are people responding?

HORSLEY: There's been a positive reaction from lawmakers in both parties. Powell has broad support in the Senate, and he is expected to win easy confirmation. As you say, this is kind of a return to tradition when presidents typically leave Fed chairs in place even if the White House changes power. And that's a way to protect the central bank's independence. The stock market is up on this announcement but not wildly up. I think betting markets had showed Powell was widely expected to get this appointment, so this was largely priced in. This was the predictable move, and markets generally like it when things move in a predictable direction.

INSKEEP: There, nevertheless, is some criticism here. I think we can expect it because it came even before the announcement. Let's start with criticism from the left. What do you hear there?

HORSLEY: Yeah, the most high-profile critic has been Massachusetts Senator Elizabeth Warren. She serves on the Senate Banking Committee, and she called Powell a dangerous man. Warren accused the Fed chair of watering down financial regulations that were enacted after the 2008 financial crisis. That criticism never really got a lot of traction, though, perhaps because even the authors of those post-financial crisis regulations defended Powell and said he deserved a second term. There have also been some progressives who would like to see the central bank take a more active role in battling climate change than it has on Powell's watch. The Fed chair is certainly a climate believer, and he's acknowledged the threat posed to the financial stability by changing climate. But he generally sees the Fed's role in that fight as fairly limited.

INSKEEP: There's also a potential criticism just in the numbers. Inflation is at its highest rate in decades, and the Fed is supposed to manage inflation and keep it down. What challenges does that pose?

HORSLEY: Yeah, it's a big challenge. Price hikes have been bigger and more persistent than the Fed had expected. And forecasters there have consistently underestimated just how high inflation would be. Now, Powell and his colleagues at the central bank still see this as largely a transitory byproduct of the pandemic, and they expect price increases to settle down when the pandemic recedes. But that's taking a long time, and the Fed does say it's watching closely and will raise interest rates if inflation continues to run hot. But this is really tricky territory. The Fed doesn't want to raise interest rates prematurely and slam the brakes on the economy when there are still millions of people out of work. Treasury Secretary Janet Yellen welcomed the news this morning that Powell will stay on. She says an independent and experienced Federal Reserve is critically important in this turbulent time.

INSKEEP: Scott, thanks for the update, really appreciate it.

HORSLEY: Good to be with you, Steve.

INSKEEP: NPR's Scott Horsley on the news that President Biden has renominated Jerome Powell to remain as head of the Federal Reserve.

Copyright © 2021 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.