Biden's Wise Fed Choice

Give US President Joe Biden, a Democrat, credit for reappointing Jerome Powell, a Republican, to a second four-year term as chair of the United States Federal Reserve. In doing so, Biden passed up a very strong alternative in Lael Brainard, the candidate much preferred by progressives, and who in the abstract would also have been an excellent choice. Firmly resisting strong pressure from the left wing of the Democratic Party, Biden accomplished several things at once.

    First, and most important, he reaffirmed the central bank’s independence from political pressures. His predecessor, Donald Trump, inherited a very capable central bank head, Janet Yellen, and he acknowledged as much. But he decided that it was preferable to have his own person in charge, perhaps hoping that he could call on Powell not to tighten monetary policy in the run-up to the 2020 election.