Jerome Powell speaks after President Joe Biden announced Monday that he will serve a second term as the Federal Reserve Chair in the South Court Auditorium at the White House in Washington, D.C. Photo by Yuri Gripas/UPI | License Photo
Nov. 22 (UPI) -- President Joe Biden on Monday nominated Jerome Powell for a second term as Federal Reserve chairman, citing his support for unprecedented levels of monetary stimulus during the COVID-19 pandemic.
Biden nominated Powell, a Republican, for another term at the central bank at a White House event despite opposition from progressive Democrats in Congress who are concerned about his leadership.
He also nominated Fed Governor Lael Brainard, the progressives' choice for the top spot, as vice chair of the board of governors. If confirmed, she would succeed Richard Clarida, whose term expires Jan. 31, 2022.
The president acknowledged the division of the opinion but said he picked Powell because the economy, while showing solid recovery, is still unsettled due to the lingering pandemic, presenting "enormous potential and enormous uncertainty."
"We know we still face challenges -- serious challenges," Biden said. "We know there is a lot of fear and uncertainty in the country. We know it's tough for families to keep up with the rising costs of gasoline, food, housing, and other essentials."
Powell, he said, provides a strong element of continuity and security during uncertain times, he said.
"When our country was hemorrhaging jobs last year and there was panic in our financial markets, Jay's steady and decisive leadership helped to stabilize markets and put our economy on track to a robust recovery," he said.
He praised Powell's commitment to "delivering full employment. We're making strong progress toward that goal now."
The nominations now go to the Senate, where Powell is expected to easily earn confirmation.
During his first term, the Fed under Powell instituted massive levels of low-interest lending designed to keep small and large businesses afloat during the pandemic while slashing interest rates to near zero.
The central bank also instituted an unprecedented bond-buying program under which its holdings of treasury bonds and mortgage-backed securities rose by more than $4 trillion, CNBC reported.
The rapid reopening of the economy has led to a burst of inflation caused by what Powell called "supply and demand imbalances" and "bottlenecks." At the White House Monday, he acknowledged the hardships the rising prices are causing.
"We know that high inflation takes a toll on families, especially those less able to meet the higher costs of essentials, like food, housing, and transportation," he said. "And we use our tools both to support the economy and a strong labor market, and to prevent higher inflation from becoming entrenched."
Powell, who was often criticized by former President Donald Trump for various monetary policies, has recently faced opposition from progressive Democrats in the party, notably Sen. Elizabeth Warren, D-Mass., for turning back pandemic-era Wall Street regulations.
"Renominating you means gambling that, for the next five years, a Republican majority at the Federal Reserve, with a Republican chair who has regularly voted to deregulate Wall Street, won't drive this economy over a financial cliff again," Warren told Powell at a Senate hearing last month, according to The New York Times.
Earlier this month, Randal Quarles, another Trump Fed appointee, announced that he will step down in December at the end of his four-year term.