U.S. President Joe Biden on Monday formally announced his intent to nominate Jerome Powell to serve as the chairman of the Federal Reserve for a second term and nominate Lael Brainard to serve as the Fed’s vice chair. Powell’s four-year term is up in February, and the U.S. president faced a key decision of whether to keep Powell, who was put in the job by a Republican, in the government’s most important economic policy job. At a time when rising consumer prices, inflation and shortages caused by the supply chain crisis are urgent concerns of the White House, there has been heightened focus on who the president was going to pick to lead the nation’s central banking system. The White House cited Powell’s “steady leadership” amid the economic turbulence of the pandemic as a reason for the decision. The Powell-led Fed took a series of unprecedented steps in March and April 2020 that helped ensure the COVID-induced recession did not morph into a full-blown depression. Economic recovery, the White House said in a statement, “is a testament to the success of the president’s economic agenda, and it is a testament to decisive action by Chair Powell and the Federal Reserve to cushion the impact of the pandemic and get America’s economy back on track.” Biden expressed his “full confidence” in Powell and Brainard in a statement. “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. Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system,” Biden said. Assuming he gets confirmed by the Senate, Powell faces a very challenging situation in his second term at the helm of the Fed. The United States is grappling with its first inflation scare in decades, parts of the economy remain scarred by the worst pandemic in a century and the Fed’s credibility has been called into question by a trading scandal. Although Powell seemed to put out the fire over the insider trading scandal with tough new ethics rules, inflation looks like the trickiest obstacle facing the Fed over the coming months. By keeping Powell in charge, the White House is signaling support for the central bank’s view that inflation is a temporary phenomenon, albeit one that has lasted longer than the Fed anticipated.(SD-Agencies) | 