Appointments and Executive Changes

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    Lael Brainard is Tapped For Vice Chair of the Federal Reserve

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    President Biden said on Monday that he would nominate Lael Brainard as the Federal Reserve’s vice chair, the No. 2 role at the Fed and one that could give her a stronger mandate to influence everything from the cost of money to the future of digital cash.Ms. Brainard, who has been a Fed governor since 2014, is already part of the inner policy circle of the Fed chair, Jerome H. Powell. But her elevation to vice chair will make her Mr. Powell’s closest collaborator on monetary policy matters if she is confirmed by the Senate.The vice chair holds little power officially, but in practice is regularly the person who floats new ideas in speeches and who helps to guide a Fed chair’s thinking on policy matters.Ms. Brainard’s elevation comes at a pivotal economic moment. The Fed is wrestling with how to set policy at a time when inflation has shot higher but millions of jobs remain missing. Like Mr. Powell, Ms. Brainard has been wary of reacting to high prices too swiftly by lifting interest rates to choke off growth, worried that it could diminish job market opportunities. But both are carefully watching the price trajectory, with an eye on ensuring that high inflation does not become a long-lasting trend.“I’m committed to putting working Americans at the center of my work at the Federal Reserve,” Ms. Brainard said during a news conference Monday at the White House, where Mr. Biden introduced his picks. “This means getting inflation down at a time when people are focused on their jobs and how far their paychecks will go.”Ms. Brainard also pledged to ensure that the economy would be “sustainable for future generations” and that the Fed would reflect “the diversity of the communities we serve.”Her views on financial regulation and climate change have won her plaudits from some progressives but drawn concern from Republicans, raising questions about how much support she might win in the Senate. Senator Patrick J. Toomey of Pennsylvania, the top Republican on the Banking, Housing, and Urban Affairs Committee, applauded Mr. Powell’s reappointment but couched his support for Ms. Brainard.“While I have concerns about regulatory policies that Governor Brainard would support as vice chair, I look forward to meeting with her to discuss these and other matters,” Mr. Toomey said in a statement on Monday.Senator Kevin Cramer of North Dakota, another Republican on the committee, also said he had concerns about Ms. Brainard’s regulatory policies and looked forward to discussing those matters with her.Ms. Brainard has been a major proponent of a more active Fed role in making sure the financial system is prepared for potential fallout from climate change. She gave a speech at the Fed’s first climate-focused conference in 2019 and has recently focused on the need for climate scenario analysis for banks, which would test how well they would hold up amid extreme weather events, sea level change and other climate-tied risks.As the sole Democrat left at the Fed board in Washington after 2018, Ms. Brainard used her position to draw attention to efforts to chisel away at bank rules, a process that was being driven by Randal K. Quarles, the Fed’s vice chair for supervision, who is stepping down in December. In the process, she created a rare public disagreement at the consensus-driven central bank, dissenting from policy changes more than 20 times in 2019 and 2020.Ms. Brainard often released detailed explanations of her dissents, laying out a road map of what changes were made and why they might be problematic. For instance, when the Fed streamlined its stress-test approach, she supported simplification in spirit — but disagreed with how it was done.“Today’s rule gives a green light for large banks to reduce their capital buffers materially, at a time when payouts have already exceeded earnings for several years on average,” she said, publishing an analysis of how she came to that conclusion, one that Mr. Quarles disagreed with.Her new position will not give her more direct say over financial regulation than she previously had — governors all have a single vote on regulatory decisions — but she and her record of dissents could be a resource for the new person coming into the vice chair for supervision job.Senator Sherrod Brown, an Ohio Democrat and chairman of the Banking, Housing, and Urban Affairs Committee, said Ms. Brainard had “spent her life fighting for a stronger, fairer economy.”“At this moment, when workers are finally starting to see more power in our economy, we need a vice chair who understands that our economic recovery must strengthen our communities and put workers first,” Mr. Brown said in a statement.Ms. Brainard would be the third woman in the Fed’s 108-year history to hold the job, following in Janet L. Yellen’s and Alice Rivlin’s footsteps. Her new role would put her in a powerful position to weigh in on the path ahead for digital currency as the Fed contemplates whether it needs to issue one, something some other global central banks have done or are in the process of doing. Her more elevated position could also give her a bigger bully pulpit on climate-related issues.Ms. Brainard is a longtime Washington policymaker. She played a leading role in European debt crisis and Chinese currency deliberations during the Obama administration as a Treasury Department official, and she worked for the National Economic Council during the Clinton administration. She earned her economics doctorate at Harvard and was an up-and-coming professor at the Massachusetts Institute of Technology before moving to Washington to pursue a career in policy.Ms. Brainard was initially viewed as a leading candidate for Biden administration Treasury secretary, and her name continues to surface as a potential successor should Ms. Yellen, who now holds that top policy role, step down. More

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    Biden Will Keep Jerome Powell as Federal Reserve Chair

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    WASHINGTON — President Biden said Monday that he would renominate Jerome H. Powell, the Federal Reserve chair, to another four-year term, opting for policy continuity at a moment of rapid inflation and economic uncertainty and betting that the Fed will do more to help workers reap the gains of the pandemic recovery.The much-awaited decision was a return to tradition in which the central bank’s top official is reappointed regardless of partisan identity — a norm bucked by former President Donald J. Trump, who appointed Mr. Powell instead of renominating Janet L. Yellen.While some progressive Democrats criticized Mr. Powell’s reappointment, the move was primarily greeted with bipartisan praise that suggested an easy path to confirmation.Mr. Biden also said he planned to nominate Lael Brainard, a Fed governor whom many progressive groups had championed to replace Mr. Powell, to serve as the Fed’s vice chair, a move that helped mollify some criticism on the left.The president and his top aides believe that Mr. Powell has done well in supporting the economy through the pandemic recession and a halting recovery, while amassing credibility by standing up to political pressure from Mr. Trump. But Mr. Biden is also making a calculated bet that the Fed chair will be more aligned with his views on the economy and, in particular, inflation, than he is with Republicans in the Senate who have demanded quicker action from the Fed to tamp down rising prices.“At this moment, of both enormous potential and enormous uncertainty for our economy we need stability and independence at the Federal Reserve,” Mr. Biden said during remarks at the White House. “And we need people of character and integrity, who can be trusted to keep their focus on the right long-term goals of our country, for our country.”The stakes in the choice are unusually high.Inflation has jumped because of booming consumer demand, tangled supply lines and labor shortages that have helped to push up the cost of used cars, couches and even food and rent. Yet millions of workers are missing from the labor market compared with before the pandemic.The central bank is charged with keeping consumer prices stable while striving for maximum employment, and striking that balance could require difficult policy choices in the months ahead.Mr. Biden, who is facing a delicate balancing act within his own party, deliberated over the pick for months. He consulted with both progressive and moderate Democrats along the way, seeking their views on inflation, worker considerations, financial regulation and climate change policy at the Fed.That included Senator Elizabeth Warren, who had called Mr. Powell “a dangerous man,” and suggested she would not support his renomination during a testy hearing in late September. Mr. Biden met with Ms. Warren on Nov. 9 in the Oval Office to discuss Fed appointments and called her last Thursday, before he had settled on a pick, according to a person with knowledge of the discussions.On Friday, Mr. Biden called Mr. Powell and Ms. Brainard to inform them that he had made his choice. The decision was influenced in large part by Mr. Biden’s belief that he and Mr. Powell are philosophically aligned when it comes to keeping interest rates low and continuing to support the economy until more people are working and wages are rising.On Monday, Mr. Biden said he believed the Fed had more work to do to get to “maximum employment.”“That’s an economy where companies have to compete to attract workers, instead of workers competing with each other for jobs, where American workers get steady wage increases after decades of stagnation, and where the benefits of economic growth are broadly shared by everyone in the country, not just concentrated for those at the top,” he said.Yet some economists, and many Republicans, say the Fed runs the risk of allowing inflation to spin out of control if it does not start to pull back efforts to fuel economic growth, with workers demanding increasingly higher wage increases to cover rising costs, resulting in 1970s-style inflation.Mr. Biden has been suffering politically as prices rise for food, gas and airplane tickets. The president has repeatedly tried to reassure Americans that his economic policies will ultimately calm inflation, a message he is expected to repeat during remarks on Tuesday.But his larger economic agenda has become tangled in the politics of price increases, particularly as the president pushes Senate Democrats to coalesce around a $2.2 trillion climate change and social policy bill that Mr. Biden says will ease inflationary pressures in years to come but Republicans warn will stoke higher prices immediately.Mr. Biden said he was certain that both Mr. Powell and Ms. Brainard would work to stabilize inflation and keep the economic recovery on track.“We’re in a position to attack inflation from the position of strength, not weakness,” he said.Mr. Powell, who appeared alongside the president and Ms. Brainard at the White House, acknowledged the challenge ahead.“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, adding that the Fed would “use our tools both to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched.”Mr. Powell’s reappointment suggests that the White House, which has a chance to fully reshape the Fed, is not aiming to completely overhaul the institution.The Biden administration already has one vacant governor role to fill, and two more seats will open early next year, giving Mr. Biden room to appoint at least three of seven governors. The president must also fill several leadership roles, including the Fed’s vice chair for supervision, a powerful position given its influence on bank oversight.Mr. Biden has been under pressure from progressives and moderate Democrats to pick a diverse slate of leaders for the Fed who would prioritize tough bank regulation and do what they could to address climate change risks in the financial system.Lael Brainard is the president’s choice to be the Federal Reserve’s vice chair.Justin T. Gellerson for The New York TimesMr. Powell has faced opposition from some progressive Democrats, who have faulted him for not using the Fed’s tools to help combat climate change and for voting to loosen financial rules for the nation’s biggest banks.He has also come under criticism for an ethics scandal that took place while he was overseeing the central bank. Two of the Fed’s 12 regional presidents made significant financial trades for their private accounts in 2020, when the Fed was actively rescuing many markets from pandemic fallout.Mr. Biden tried to ease at least some of those concerns, saying that Mr. Powell had assured him that the Fed would “accelerate” efforts to address and mitigate the risk that climate change poses to the economy.Mr. Biden also said he planned to soon nominate a new vice chair for supervision. In conversations with Mr. Biden, Mr. Powell convinced the president he would follow the lead of that person in setting financial regulatory policy, according to people with knowledge of the matter.Whether that will be enough to appease Mr. Powell’s critics remains to be seen. Ms. Warren said in a statement on Monday that she would not vote for Mr. Powell’s confirmation. Still, she did not recount her litany of concerns about him.Another critic, Senator Sheldon Whitehouse of Rhode Island, who opposed Mr. Powell’s reappointment, said on Monday that was “disappointed” in Mr. Biden’s decision. But he did not say whether he would vote no on his nomination.“I sincerely hope that, if confirmed, Powell will reassess his past opposition to utilizing the Fed’s regulatory tools to minimize climate-related risks to the financial sector,” he said.Other Democrats were more supportive, including Senator Sherrod Brown of Ohio, who praised Mr. Powell for helping steer the economy through the pandemic. Mr. Brown’s position is important — he is the chairman of the Senate Banking Committee, which oversees the Fed and will handle the confirmation hearings for both Mr. Powell and Ms. Brainard.Republicans, who supported Mr. Powell when he was nominated as chair by Mr. Trump, also lauded Mr. Biden’s decision.Senator Patrick J. Toomey, Republican of Pennsylvania and the ranking member on the Senate Banking Committee, released a statement saying he would support Mr. Powell’s nomination, as did several other of his party’s senators. That full-throated support did not extend to Ms. Brainard, however, with Mr. Toomey and other Republicans saying they had some concerns about her views on financial regulation and other issues.The big challenge ahead for Mr. Powell is deciding when — and how quickly — to remove pandemic-era economic support that the central bank has been using to cushion workers, businesses and financial markets.The Fed has so far decided to slow its large bond-purchase program, a first step toward withdrawing monetary policy support that will leave it more nimble to raise interest rates next year if reining in the economy becomes necessary.The federal funds rate has been set to near-zero since March 2020, keeping many types of borrowing cheap and helping to fuel home and car purchases and other types of demand that in turn set the stage for strong hiring. Raising it could cool off growth and weaken inflation.Yet trying to slow price gains would come at a cost. Workers are still trickling back after severe job losses at the onset of the pandemic, and the Fed is hoping to give the job market more space and time to heal. That’s especially true because continued waves of infection may be keeping many people from searching for work, either out of health concerns or because they lack child care. More

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    Biden Renominates Powell as Fed Chair

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    Whether it’s reporting on conflicts abroad and political divisions at home, or covering the latest style trends and scientific developments, Times Video journalists provide a revealing and unforgettable view of the world.Whether it’s reporting on conflicts abroad and political divisions at home, or covering the latest style trends and scientific developments, Times Video journalists provide a revealing and unforgettable view of the world. More

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    Behind the Powell Pick: A Bet the Economy Has Room to Grow

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    President Biden’s decision to renominate Jerome H. Powell to head the Federal Reserve reflects the president’s belief that despite high inflation, America’s economy still has a long way to go to deliver strong gains to women, Black and Hispanic Americans and low-wage workers trying to climb into the middle class.Mr. Biden made clear during a White House appearance that he believes Mr. Powell is philosophically aligned with his vision that the central bank needs to keep interest rates low and continue supporting the economy until it reaches maximum employment.“That’s an economy where companies have to compete to attract workers, instead of workers competing with each other for jobs, where American workers get steady wage increases after decades of stagnation, and where the benefits of economic growth are broadly shared by everyone in the country, not just concentrated for those at the top,” Mr. Biden said Monday.The president’s decision is also based on his belief that Mr. Powell and Lael Brainard, the Fed governor whom Mr. Biden nominated for vice chair on Monday, share his views on stabilizing inflation while being careful not to snuff out the recovery before the labor market heals.It is a gamble on several fronts for the president. He is betting that Mr. Powell will be more aligned with his views on the economy than he is with Republicans in the Senate who have decried rising inflation for months and demanded action from the Fed. Many of those Republicans endorsed Mr. Powell quickly on Monday, expressing hope that he would act swiftly to combat inflation.The president is also betting that his team is correct in its economic diagnosis that the inflation risk is fading and marginalized groups of workers still need help to reap the full gains of economic growth.Mr. Biden and his aides view the recent burst of inflation, which surged to its highest levels in three decades last month, as largely the product of crimps in global supply chains — and not a function of monetary policy that necessitates quick rate increases from the central bank.The decision to renominate Mr. Powell and to elevate Ms. Brainard is the sum of a wide range of political and economic calculations. Chief among them was choosing the chair with the desire, and bipartisan support, to pursue full employment.But administration officials say other considerations also favored Mr. Powell’s reappointment, like the need to maintain central bank stability in the midst of the economic disruption of a pandemic and the record of independence that Mr. Powell built over a four-year term that included withering criticism from former President Donald J. Trump, who appointed him to the chairmanship.Mr. Powell also appears to have defused, in the eyes of the president and his aides, liberal Democrats’ concerns that on his watch the Fed has not regulated big banks and other financial institutions stringently enough. In conversations with Mr. Biden leading up to the decision, Mr. Powell convinced the president he would follow the lead of the Fed’s vice president for supervision — an open position that Mr. Biden has yet to fill — in determining the central bank’s policies on financial regulations.Mr. Biden is expected to announce his pick for that job early next month, and Democrats expect him to nominate someone who will take a hard line on banks, a key demand of Senator Elizabeth Warren of Massachusetts, a progressive who opposes Mr. Powell’s renomination and has called him “dangerous.” Mr. Biden recently discussed his Fed picks with Ms. Warren, and he has been in regular contact with Senator Sherrod Brown of Ohio, the Democrat who leads the banking committee. More

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    Elizabeth Warren Says She Will Oppose Jerome Powell’s Nomination

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    Senator Elizabeth Warren, the Massachusetts Democrat, said on Monday that she would not vote to confirm Jerome H. Powell for a second term as chair of the Federal Reserve, citing “failures on regulation, climate and ethics.”Ms. Warren, who has called Mr. Powell “a dangerous man,” had been pushing for President Biden to name Lael Brainard as the next chair of the central bank. Mr. Biden’s decision to name Ms. Brainard to the No. 2 spot at the Fed drew Ms. Warren’s support but she said she would continue to push for additional governors who support aggressive financial regulation.“It’s no secret I oppose Chair Jerome Powell’s renomination, and I will vote against him,” Ms. Warren said in a statement.Other powerful Democrats, along with Republican lawmakers expressed. support for Mr. Biden’s decision, saying it would keep the central bank on a steady course and protect its political independence at a time of inflation and economic uncertainty for the country.Senator Sherrod Brown, Democrat of Ohio and the chair of the Senate Banking Committee, which oversees the Fed, praised Mr. Powell’s role in helping the labor market heal from the pandemic downturn and giving workers greater bargaining power in terms of higher wages.“The Federal Reserve must continue to help steer our economic recovery in the right direction — toward full employment and an economy that empowers workers and their families,” Mr. Brown said. “I look forward to working with Powell to stand up to Wall Street and stand up for workers, so that they share in the prosperity they create.”Senator Jon Tester, a Montana Democrat, said on Twitter that the decision “a smart move.”Mr. Biden’s decision to reappoint Mr. Powell, who was first appointed by former President Donald J. Trump, returns the country to a long tradition in which presidents of both parties have embraced the Fed chairs selected by their predecessors, in an expression of support for the central bank’s political independence. Mr. Trump bucked the tradition, replacing Janet L. Yellen with Mr. Powell in 2018.Some progressive Democrats had urged Mr. Biden to also break with tradition and appoint someone else to the role. In addition to Ms. Warren, Senators Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon had called for Mr. Powell to be replaced, citing his views on climate change, financial regulation and an ethics scandal at the central bank.Mr. Whitehouse said in a statement on Monday that he was “disappointed” in the decision, adding that Mr. Powell had done too little to address climate change.“Our Fed Chair must devote immediate and thorough attention to the climate threat before it is too late,” Mr. Whitehouse said in the statement. “I sincerely hope that, if confirmed, Powell will reassess his past opposition to utilizing the Fed’s regulatory tools to minimize climate-related risks to the financial sector.”Americans for Financial Reform, a coalition of community, labor and civil rights groups, called the decision “a major disappointment to those of us who have fought for tougher regulation of Wall Street.”Mr. Biden’s decision to nominate Ms. Brainard for vice chair could help mollify some of those concerns. Some progressive groups had been pushing for Ms. Brainard to lead the central bank, in part because of her views on climate change and financial regulation.Mr. Whitehouse applauded Ms. Brainard’s nomination in his statement, saying “she clearly recognizes the gravity of the climate-related financial and economic risks facing our nation and will push the Fed to fully utilize its regulatory authorities in this space.”Other groups that have been critical of the Fed expressed support for the picks, particularly Ms. Brainard.The Fed Up Campaign, which advocates more accommodative monetary policies and full employment, said the Fed needed “to continue pro-employment, pro-wage growth, pro-racial justice macroeconomic policies for as long as economic conditions allow.”“Governor Brainard is a strong choice for Vice Chair, and we are expecting Biden to continue to name truly bold and pro-worker choices to the vacant governor seats,” the group said.Lawmakers also expressed support for the move, though some Republicans expressed concerns about Ms. Brainard, who has pushed for tougher financial regulations.Senator Patrick J. Toomey of Pennsylvania, the ranking member on the Senate Banking Committee, said that he disagreed with some of Mr. Powell’s decisions during the crisis, but that he would support his nomination.“When the pandemic hit in 2020, Chairman Powell acted swiftly and took extraordinary and necessary steps to help stabilize financial markets and the economy,” Mr. Toomey said in a statement.The senator expressed “concerns about regulatory policies that Governor Brainard would support as Vice Chair,” but said looked forward to discussing those issues.Both Mr. Powell and Ms. Brainard must win 60 votes in order to be confirmed by the Senate. More

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    Teamsters Vote for Sean O'Brien, a Hoffa Critic, as President

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    Sean O’Brien scored a decisive victory among union members after criticizing the current leadership as too timid in UPS talks and Amazon organizing.Sean O’Brien was a rising star in the International Brotherhood of Teamsters in 2017 when the union’s longtime president, James P. Hoffa, effectively cast him aside.But that move appears to have set Mr. O’Brien, a fourth-generation Teamster and head of a Boston local, on a course to succeed Mr. Hoffa as the union’s president and one of the most powerful labor leaders in the country.A Teamsters vice president who urged a more assertive stand toward employers like the United Parcel Service — as well as an aggressive drive to organize workers at Amazon — Mr. O’Brien has declared victory in his bid to lead the nearly 1.4 million-member union.According to a tally reported late Thursday on an election supervisor’s website, he won about two-thirds of the votes cast in a race against the Hoffa-endorsed candidate, Steve Vairma, another vice president. He will assume the presidency in March.The result appears to reflect frustration over the most recent UPS contract and growing dissatisfaction with Mr. Hoffa, who has headed the union for more than two decades and whose father did from 1957 to 1971. The younger Mr. Hoffa did not seek another five-year term.In an interview, Mr. O’Brien said success in organizing Amazon workers — a stated goal of the Teamsters — would require the union to show the fruits of its efforts elsewhere.“We’ve got to negotiate the strongest contracts possible so that we can take it to workers at Amazon and point to it and say this is the benefit you get of being in a union,” he said.David Witwer, an expert on the Teamsters at Pennsylvania State University at Harrisburg, said it was very rare for the Teamsters to elect a president who was not an incumbent or backed by the incumbent and who was sharply critical of his predecessor, as Mr. O’Brien was of Mr. Hoffa.Since the union’s official founding in 1903, Dr. Witwer said in an email, “there have been only two national union elections that have seen an outside reformer candidate win election as president.”During the campaign, Mr. O’Brien, 49, railed against the contract that the union negotiated with UPS for allowing the company to create a category of employees who work on weekends and top out at a lower wage, among other perceived flaws.“If we’re negotiating concessionary contracts and we’re negotiating substandard agreements, why would any member, why would any person want to join the Teamsters union?” Mr. O’Brien said at a candidate forum in September in which he frequently tied his opponent to Mr. Hoffa.Mr. O’Brien has also criticized his predecessor’s approach to Amazon, which many in the labor movement regard as an existential threat. Although the union approved a resolution at its recent convention pledging to “supply all resources necessary” to unionize Amazon workers and eventually create a division overseeing that organizing, Mr. O’Brien said the efforts were too late in coming.“That plan should have been in place under our warehouse director 10 years ago,” he said in the interview, alluding to the position of warehouse division director that his opponent, Mr. Vairma, has held since 2012.The outcome appears to reflect frustration over the union’s growing dissatisfaction with the tenure of James P. Hoffa.Calla Kessler/The New York TimesIn an interview, Mr. Hoffa said that the union was broke and divided when he took over and that he was leaving it “financially strong and strong in every which way.”He said he was proud of the recent UPS contract, calling it “the richest contract ever negotiated” and pointing out that it allows many full-time drivers to make nearly $40 an hour.He said Mr. O’Brien’s critique of the union’s efforts on Amazon was unfair. “No one was doing it a decade ago,” Mr. Hoffa said. “It’s more complex than just going out and organizing 20 people at a grocery store. He sounds like it’s so simple.”Mr. O’Brien did not elaborate on his own plans for organizing Amazon, saying he wanted to solicit more input from Teamsters locals, but suggested that they would include bringing political and economic pressure to bear on the company in cities and towns around the country. The union has taken part in efforts to deny Amazon a tax abatement in Indiana and to reject a delivery station in Colorado.Mr. O’Brien, who once worked as a rigger, transporting heavy equipment to construction sites, was elected president of a large Boston local in 2006. Within a few years, he appeared to be ensconced in the union’s establishment wing.In a 2013 incident that led to a 14-day unpaid suspension, Mr. O’Brien threatened members of Teamsters for a Democratic Union, a reform group, who were taking on an ally of his in Rhode Island. “They’ll never be our friends,” he said of the challengers. “They need to be punished.”Mr. O’Brien has apologized for the comments and points out that the reform advocate who led the challenge in Rhode Island, Matt Taibi, is now a supporter who ran on his slate in the recent election.The break with Mr. Hoffa came in 2017. Early that year, the longtime Teamsters president appointed Mr. O’Brien to a position whose responsibilities included overseeing the union’s contract negotiation with UPS, where more than 300,000 Teamsters now work.Understand Amazon’s Employment SystemCard 1 of 6A look inside Amazon. More

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    Elizabeth Warren Calls Jerome Powell a ‘Dangerous Man’

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    Senator Elizabeth Warren, Democrat of Massachusetts, blasted the Federal Reserve chair, Jerome H. Powell, for his financial regulation track record and said that she would not support him if the White House renominated him, calling him a “dangerous man to head up the Fed.”Mr. Powell’s term as head of the central bank ends in early 2022, and the Biden administration is considering whether to reappoint him. Mr. Powell, a Republican, was nominated to the Fed’s Board of Governors by former President Barack Obama and elevated to chair by former President Donald J. Trump.While some prominent Democratic economists and advocacy groups support Mr. Powell, who has been intensely focused on the labor market during his term as Fed chair, some progressives openly oppose him. They often cite his track record on financial regulation — as Ms. Warren did to his face on Tuesday, as he testified before the Senate Banking Committee.“The elephant in the room is whether you’re going to be renominated,” Ms. Warren said, looking down at the Fed chair during the hearing. “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.”Ms. Warren, and those who agree with her, have worried that leaving Mr. Powell in place will prevent the Fed from taking a tougher stance on financial regulation. Mr. Powell has said that when it comes to regulatory matters, he defers to the Fed’s vice chair for supervision, noting that Congress created that job to lead up bank oversight following the 2008 financial crisis.“I respect that that’s the person who will set the regulatory agenda going forward,” Mr. Powell said during a news conference last week. “And furthermore, it’s fully appropriate to look for a new person to come in and look at the current state of regulation and supervision and suggest appropriate changes.”Ms. Warren’s colleague Senator Michael Rounds, a Republican from South Dakota, followed her scathing comments by saying that Mr. Powell deserved to be renominated, and that he looked forward to working with him for the next several years.The White House has so far given little indication of whom it will pick to lead the central bank.President Biden already has the opportunity to fill one open governor position at the Fed, and several other roles will soon become available: The governor seat of the Fed’s vice chair, Richard Clarida, will expire in the coming months, as will Randal K. Quarles’s position as vice chair for supervision. The openings could give the administration a chance to remake the central bank from the top with its nominations, who must pass Senate confirmation.Other lawmakers at the Senate hearing pushed Mr. Powell to focus on improving diversity at the central bank — highlighting another key concern among Democrats as the leadership shuffle gets underway.Senator Sherrod Brown, a Democrat from Ohio and the head of the Senate Banking Committee, pointed out that there had never been a Black woman on the Federal Reserve’s Board of Governors in Washington, while also referring to reporting from earlier this year that showed a dearth of Black economists at the central bank.He asked if Mr. Powell believed that the central bank should have a Black woman on its Board of Governors.“I would strongly agree that we want everyone’s voice heard around the table, and that would of course include Black women,” Mr. Powell said. “We of course have no role in the selection process, but we would certainly welcome it.”Lisa Cook, a Michigan State University economist, and William Spriggs, chief economist of the labor union AFL-CIO, are often raised as possible candidates for governor positions or leadership roles. Both are Black. Lael Brainard, a white woman who is currently a Fed governor, is frequently raised as a possible replacement for Mr. Powell if he is not renominated, and Sarah Bloom Raskin, a white woman who is a former top Fed and Treasury official, is often suggested as a replacement for Mr. Quarles.Mr. Powell, as he noted, has no formal role in selecting his future colleagues at the Fed Board.He and his colleagues at the Fed Board will, however, have a chance to weigh in on who will take over two newly open positions around the Fed’s decision-making table. The central bank has 19 total officials at full strength, seven governors and 12 regional bank presidents.Robert S. Kaplan, the Dallas Fed president, and Eric S. Rosengren, the Boston Fed president, both announced their imminent retirements on Monday, amid widespread criticism of the fact that they were trading securities in 2020 — during a year in which the Fed unrolled a widespread market rescue in response to the pandemic.Mr. Powell addressed that scandal on Tuesday, pledging to lawmakers that the Fed would change its ethics rules and saying that the Fed was looking into the trading activity to make sure it was in compliance with those rules and with the law.“Our need to sustain the public’s trust is the essence of our work,” Mr. Powell said, adding that “we will rise to this moment.”Beyond grabbing headlines, the departures will leave two regional bank jobs available at the Fed. The regional branches’ boards, except for bank-tied members, will search for and select replacement presidents. The Fed’s governors in Washington have a “yes” or “no” vote on the pick.The Fed has never had a Black woman as a regional bank president, either. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, is the first Black man to serve in one of those roles.At the Board of Governors, Mr. Quarles’s leadership term ends most imminently, on Oct. 13. His position as governor does not expire until 2032, and he has signaled that he will likely stay on as a Fed governor at least through the end of his leadership term at the Financial Stability Board, a global oversight body, in December. Mr. Powell’s leadership term ends in early 2022, though he could stay on as governor since his term in that role does not expire until 2028. Mr. Clarida will have to leave early next year unless he is reappointed. More

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    Should Biden Reappoint Jerome Powell? It Depends on His Theory of Change.

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    Lael Brainard is more aligned with the president, so picking her may please Democrats. Powell may have a more bipartisan seal of approval.President Biden is facing a big decision, and deep divides among his allies. Should he reappoint Jerome Powell to lead the Federal Reserve when Mr. Powell’s term ends early next year, or select a replacement who is more fully aligned with the Democratic policy agenda?Pro-Powell forces argue that he has proved exceptionally committed to generating a robust job market that will lead to better conditions for American workers. Those who argue against reappointment say that he has been too soft a regulator of banks and other financial institutions, and that he is insufficiently committed to using the Fed’s powers to combat climate change.But there is a more fundamental question for President Biden: What is his theory of how change happens?Lael Brainard, a Fed governor and a leading candidate for the job, and the Fed chair, Jerome Powell.Ann Saphir/ReutersOne theory of change is that, when a party wins the presidency and the Senate (however narrowly), it should put in place appointees who are fully fledged adherents of its agenda. These appointees will then push that agenda with every possible tool at their disposal. If they make lots of enemies, or see their more aggressive actions struck down by courts — or generally emerge as polarizing forces — so be it.If Mr. Biden were to take this approach, he might seek a firebrand for the top job at the Fed, betting that the nominee could both secure confirmation in a closely balanced Senate and steer the nation’s central bank toward a more activist stance on a range of liberal priorities.A reappointment of Mr. Powell would follow the opposite theory of change. In this version, there is great value in appointees who have the biography and political skill to make urgent policy changes seem sensible and reasonable, not scary. This strategy, the logic goes, will make more aggressive policy action achievable. And it could also make it more durable in the face of court challenges and changes in the control of government.Another leading candidate for the job, Lael Brainard, 59, would essentially split the difference between those approaches. She has been a Fed governor for the last seven years, collaborating closely with Mr. Powell and other top leaders of the central bank.She is hardly a firebrand; her speeches are carefully crafted and her positions well within the economics mainstream. But she is a Democrat who donated to Hillary Clinton’s presidential campaign in 2016 and who dissented on numerous actions to loosen bank regulations championed by Trump appointees. She has also expressed public alarm about the economic implications of climate change.It is a distinctly different background and persona from Mr. Powell, a 68-year-old Princeton graduate who worked as a Wall Street dealmaker and private equity executive. He served in the George H.W. Bush administration, and was appointed to lead the central bank by President Donald J. Trump.He has also become, in recent years, a full-fledged convert to the religion of full employment. This is the view that the Fed should allow the economy to run hot enough that opportunity opens to people across American society, including historically marginalized groups.This view is more commonly embraced on the political left. But Mr. Powell came to it over the second half of the 2010s, as the labor market improved to levels far beyond what the Fed’s own economic models had envisioned without spurring unwelcome inflation.His stewardship of the Fed is, in that sense, the 21st-century American embodiment of the concept of “Tory men, Whig measures.”The phrase, from a 19th-century novel by Benjamin Disraeli, who would go on to become British prime minister, refers to a government in which hardheaded conservatives (the Tories) nevertheless carry out ideas that originated in left-of-center (Whig) circles, aimed at improving life for the masses.What would that mean if Mr. Powell were to be appointed to a second term as Fed chair starting in early 2022?It would mean that the major rethinking of the Fed’s approach to the labor market would continue to be led by a registered Republican whom 84 senators voted to confirm in 2018. Ms. Brainard was confirmed with 61 votes in 2014, including 11 Republicans.Part of the case for reappointing Mr. Powell is that his mere presence — his credibility on both sides of the aisle in Congress and on Wall Street — would be an asset to the administration’s broader economic project at a time of surging inflation and bubbly financial markets. The fact that he is not a Biden ally, or a Democrat at all, becomes a feature rather than a bug.“Part of the Biden mantra has been to restore civility and downplay partisan tensions,” said Sarah Binder, a George Washington University professor who has written extensively on the Fed’s place in American politics. “It’s somewhat fortuitous for Biden that if he wants to reappoint Powell he can do it under the guise of restoring the independence of the Fed even though Powell thoroughly fits his views on monetary policy.”During Mr. Powell’s chairmanship, the Fed has weakened several restrictions on big banks, loosening the capital and liquidity requirements placed on them, among other steps. It has also allowed several large bank mergers to occur.Ms. Brainard’s dissents from regulatory actions were unusual for the consensus-driven Fed. When she was the lone vote against one action in 2018, no governor had dissented from one in seven years. She would go on to dissent 20 times over the next three years.In regulatory policy, Fed leaders traditionally defer to elected leaders while aiming to maintain a wall of independence around monetary policymaking. And that has been enough to make presidents willing to reappoint Fed leaders from the other party even when they have disagreements over regulatory approach.The Fed chair Ben Bernanke, for example, was a Bush appointee. He was supportive of regulatory changes put in by the Obama-appointed Fed governor Dan Tarullo, and President Obama went on to reappoint Mr. Bernanke. Notably, as a Fed governor, Mr. Powell did not dissent from any regulatory steps championed by Mr. Tarullo.And while those cross-party reappointments have parallels to this moment — see also Ronald Reagan/Paul Volcker and Bill Clinton/Alan Greenspan — there may be an even closer historical parallel.In the 1930s, Franklin Delano Roosevelt turned not to any of the bright New Deal economists who were advising him on policy, but to a Utah banker named Marriner S. Eccles.Mr. Eccles embraced deficit spending and loose monetary policy to help propel the nation out of the Great Depression, but presented himself as merely a pragmatic businessman recommending a sensible course. He distanced himself from the more academic intellectuals tied to the administration.“Eccles served a very important purpose for the Roosevelt administration because he was a millionaire who espoused policies that were friendly to what Roosevelt wanted to do,” said Eric Rauchway, a historian at the University of California, Davis, and author of “Why the New Deal Matters.”In public appearances, Mr. Eccles emphasized that he arrived at his views not by reading John Maynard Keynes or other influential intellectuals of the era, but by working through things on his own. And while Mr. Eccles was closely aligned with the Roosevelt inner circle on macroeconomic management, he was more wary of other administration policies that involved expansive government control of the economy. And that, Mr. Rauchway said, was why he was placed at the Fed instead of the White House or Treasury.Mr. Biden is weighing a decision that will shape the economic backdrop of the remainder of his term. The question is whether the political logic that led Mr. Roosevelt to Mr. Eccles — and that led several other presidents to reappoint central bankers from the opposite party — applies in a world of high polarization and exceptionally high stakes. More