FILE PHOTO: U.S. Senator Joe Manchin (D-WV) delivers remarks to reporters at the U.S. Capitol in Washington, D.C., U.S. November 1, 2021. REUTERS/Jonathan Ernst
November 19, 2021
By Jonnelle Marte and Ann Saphir
(Reuters) – As President Joe Biden nears a decision on appointing a Federal Reserve chair, action over the matter continued to pick up on Friday in the U.S. Senate, which must confirm the choice, with a key moderate Democrat seeking time with the potential nominees and two more progressive lawmakers voicing opposition to the incumbent, Jerome Powell.
In the absence of a decision, lawmakers have been weighing in themselves on the two known candidates: Powell and Fed Governor Lael Brainard. On Friday the White House said there will be “more to report early next week” on Biden’s decision, which has taken on added significance with inflation raging at 30-year highs and eroding the first-term Democrat’s popularity.[nW1N2S304H]
Senator Joe Manchin, a West Virginia Democrat who has not yet decided which candidate to support, is seeking to meet with Brainard and would like to hold a follow-up meeting with Powell after speaking with him on Wednesday, according to a report by Bloomberg.
Two progressive Democratic senators, Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon, issued a joint statement on Friday opposing Powell’s reappointment, saying he has not done enough to combat climate change, a topic Fed officials are focusing on from a financial stability and regulatory standpoint.
“President Biden must appoint a Fed Chair who will ensure the Fed is fulfilling its mandate to safeguard our financial system and shares the Administration’s view that fighting climate change is the responsibility of every policymaker,” they wrote in the statement. “That person is not Jerome Powell.”
Powell is still seen as having a clearer path to confirmation, with support from Republicans like Senator Pat Toomey, who have signaled they would oppose Brainard, as well as from Democrats like Jon Tester, who confirmed his support for the incumbent on Thursday.
In betting markets, Powell’s stock has fallen to what traders on PredictIt’s online forum consider to be a 62% chance of confirmation, versus Brainard’s 40%.
Manchin said on Thursday that he was looking favorably at the prospect of Powell being renominated as Fed chair after the two spoke and discussed his views on inflation, according to a spokesperson.
Manchin supported Powell’s nomination the first time around, but has more recently expressed worries about rising inflation and the Fed’s bond-buying program. Merkley voted against Powell’s first nomination and Whitehouse voted in favor.
Biden is expected to choose a nominee for Fed chair before next Thursday’s Thanksgiving holiday, with Friday’s comment on timing from the White House seeming to confirm that timeline. It is not clear that Biden needs the support of the three Democrats to get his Fed chair nominee approved.
Little distinguishes Powell, a Republican elevated to the job by Biden’s predecessor, Donald Trump, and Brainard, a Democrat put on the Fed board by Barack Obama, from a policy perspective. Both generally favor a more tolerant view of high inflation in the aim of allowing the job market more time to continue healing from the broadside delivered by the COVID-19 pandemic. There are some 4.2 million fewer Americans on corporate or government payrolls than in February 2020.
But the degree to which the inflation stirred by the reopening of the economy has persisted – and overshot the Fed’s 2% target by a wide margin – has complicated the picture and is raising concern among politicians, including Biden. Consumer sentiment has plunged – as have Biden’s approval ratings – and that may shift the White House calculus to favoring which of the two is seen taking firmer and earlier steps to bring the march of price increases to heel.
(Reporting by Jonnelle Marte and Ann Saphir; editing by Jonathan Oatis and Chizu Nomiyama)