President Biden on Monday nominated Federal Reserve Chairman Jerome H. Powell for a second term and praised him for exhibiting political independence and steady leadership during the economic chaos of the COVID-19 pandemic.
The nomination ended a months-long guessing game about whether he would bow to pressure from his party’s progressive wing and replace Mr. Powell as the head of the nation’s most influential economic body.
The president will also nominate Lael Brainard, who was the far-left’s pick to be the Fed’s next chairman, to serve as vice chair.
At a White House ceremony to announce the nominations, Mr. Biden pushed back against his party’s far-left members by insisting that Mr. Powell, who was promoted to Fed chairman by then-President Trump, would not let political winds dictate his decisions.
“At this moment of enormous potential and uncertainty, we need stability and independence at the Federal Reserve,” Mr. Biden said. “Jay has proven the independence I value in the Fed chair.”
Mr. Biden said he didn’t want to change course from the “progress” of the economic recovery since he took office 10 months ago.
He also highlighted Mr. Powell’s “steady and decisive leadership” to put our economy on track to a “robust recovery” from the COVID-19 shutdowns.
Mr. Powell’s four-year term expires in February. The president was facing pressure from far-left members of his party to replace him because he supported deregulating financial markets.
They had pushed for Ms. Brainard, a Federal Reserve governor and the sole Democrat on the Fed’s board. Ms. Brainard had been with the president for an interview this month that reportedly went so well it extended beyond the allotted hour.
The Senate will need to confirm Mr. Powell for his second term, setting up a potential intraparty squabble.
Mr. Powell, a Republican, was nominated to the Fed’s Board of Governors by then-President Obama. He was then promoted to chair by Mr. Trump, who tapped him to succeed Janet Yellen, who is now Mr. Biden’s secretary of the Treasury.
Mr. Powell was one of the few Trump nominees to secure overwhelmingly bipartisan support in the Senate, confirmed in an 84-13 vote.
That was one of the largest ever for a Trump nominee.
He also received a significant amount of support from organized labor.
Mr. Powell faced blistering criticism from far-left Democrats after it was revealed that top Federal Reserve officials were trading securities during the pandemic.
Sen. Elizabeth Warren accused Mr. Powell of creating “a culture of corruption” at the bank. The Massachusetts Democrat and progressive hero said the transactions raise “legitimate questions” of possible conflicts of interest and insider trading.
Ms. Warren also criticized Mr. Powell’s track record on financial deregulation. She said at a recent Senate hearing that Mr. Powell “was a dangerous man” because he “regularly voted to deregulate Wall Street.”
Ms. Warren added that the Fed, under Mr. Powell’s leadership, could “drive this economy over a financial cliff again.”
Some leftist Democrats on Monday signaled support for Mr. Powell.
House Ways and Means Committee Chairman Richard Neal, Massachusetts Democrat, said keeping Mr. Powell at the helm is “the strong sign of stability our country and the global markets need.”
Sen. Sherrod Brown, Ohio Democrat, said that under Mr. Powell’s leadership, unemployment has fallen and workers have boosted their strength in the workplace.
Still, the criticism of Mr. Powell created an opening for Ms. Brainard and turned the nomination into a horse race.
Sen. Pat Toomey of Pennsylvania, the ranking Republican on the Banking Committee, said he supports Mr. Powell’s nominee but had some questions about Ms. Brainard’s policies.
“While I have concerns about regulatory policies that Governor Brainard would support as Vice Chair for Supervision, I look forward to meeting with her to discuss these and other matters,” Mr. Toomey said in a statement.
The U.S. economy has improved coming out of the COVID-19 pandemic, beating expectations by adding 531,000 jobs in October. But it is still bogged down by surging inflation and supply chain bottleneck that has reduced the supply of household goods, sending prices north.
“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,” Mr. Biden said.