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Powell secures Biden nomination to lead US Fed for second term

House Oversight Committee Hears Testimony On Treasury And Federal Reserve's Pandemic Response
WASHINGTON, DC - SEPTEMBER 30: Jerome Powell, chairman of the U.S. Federal Reserve, departs following a House Financial Services Committee hearing in Washington, D.C., U.S., on Thursday, Sept. 30, 2021. The Treasury secretary this week warned in a letter to congressional leaders that her department will effectively run out of cash around Oct. 18 unless Congress suspends or increases the debt limit. Photographer: Al Drago/Bloomberg at a House Financial Services Committee hearing on oversight of the Treasury Department and Federal Reserve coronavirus pandemic response on Capitol Hillon September 30, 2021 in Washington, DC. The Treasury secretary this week warned in a letter to congressional leaders that her department will effectively run out of cash around Oct. 18 unless Congress suspends or increases the debt limit. (Photo by Al Drago-Pool/Getty Images)

US Federal Reserve chair Jerome Powell has today been recommended for a second four-year term to lead the central bank by President Joe Biden ending months of speculation over whether he would remain in the job.

Powell has come under intense scrutiny while heading the world’s most influential central bank due to the Fed keeping policy ultra loose at a time when US inflation is running at its highest level for three decades.

Lael Brainard had been tipped to take the top job at the Fed, but was pipped to the post for Biden’s nomination. She has been nominated to be vice-chair of the central bank. 

Powell, who has been characterised as a more Republican-minded chair, must now be confirmed by the Democrat controlled Senate.

US President Joe Biden said: “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.”

Democratic Senator Elizabeth Warren has said she will vote against Powell’s nomination.

Meanwhile, US banking stocks lept on the news of Biden recommending Powell for a second term.

Earlier this month, the Fed became the first major central bank to move to hose-down runaway inflation by voting to start curbing its $120bn a month bond buying programme, which is due to end next summer.

Powell, 68, was recommended to take the reins at the Fed by former US President Donald Trump in 2017.

He launched an emergency stimulus programme in the immediate aftermath of the Covid-19 crisis to keep the global financial system functioning, winning plaudits for the scale of the response.

However, economists have questioned whether the Fed has moved too slowly to tackle historically high inflation.

Powell has also overseen a trading scandal on his watch after two senior Fed officials left the central bank over controversial trades they made as the Fed was exerting a heavy influence over the direction of the US economy.