President Biden on Monday will nominate Federal Reserve Chairman Jerome Powell for a second term.
The decision, which was announced by Mr. Biden, 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.
Mr. Biden said he didn’t want to change course from the “remarkable progress” of the economic recovery in the last 10 months.
“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,” Mr. Biden said in a statement.
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. Brianard had been with the president for an interview this month that reportedly went so well it extended beyond the allotted hour.
Mr. Biden also met separately with Mr. Powell at the White House.
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 former President Obama. He was then promoted to chair by former President 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.”
That criticism created an opening for Ms. Brainard and turned the nomination into a horse race.
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.