The president also named Fed board member Lael Brainard as vice chair. Brainard had been considered as a possible replacement for Powell.
“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,” Biden said in a statement. “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.”
The central bank began buying $120 billion per month of Treasuries and mortgage-backed securities as a way to buoy markets and keep interest rates near record lows. Powell led a revision of the Fed’s approach to monetary policy, emphasizing the health of the labor market as much as inflation and price stability.
Powell steadfastly refused entreaties to cut back on the Fed’s accommodative policy while also resisting calls to raise interest rates, saying the labor market still showed signs it had not recovered enough to get lower-income and other workers back into the economy.
Powell recently announced the central bank would begin reducing its asset purchases by at least $15 billion a month but added the move should not be interpreted as a step toward increasing rates.
“The steady leadership of Chair Powell and the Federal Reserve helped ensure that America’s economy was able to recover from a once-in-a-generation health and economic crisis,” Treasury Secretary Janet Yellen, a former Fed chair, said in a statement.
Greg McBride, chief financial analyst at Bankrate, said in a statement: “With the Federal Reserve at an inflection point of starting to dial back stimulus, continuity at Fed Chair is key. It’s tough to change jockeys in the middle of the race.”
Nominated to the Fed by former President Barack Obama in 2014, Powell was chosen as chairman by former President Donald Trump. He has enjoyed bipartisan support, while receiving criticism from the liberal wing of the Democratic Party, notably Sens. Elizabeth Warren, Sheldon Whitehouse and Jeff Merkley. In contrast, centrist Democrats like Montana Sen. Jon Tester called for his renomination.