Jerome Powell is "the right person" to guide the Fed, Joe Biden said during a White House speech, along with Mr. Powell and Ms. Brainard, as the United States faces its worst inflationary surge since 30 years.

"We need stability and independence at the Federal Reserve," said the US president.

He praised the action of "Jay" Powell, a Republican, over the past four years, and in particular the way in which he had resisted the regular attacks of former President Donald Trump against him.

"This is just one of the many reasons Jay enjoys support from all walks of life," said Joe Biden, deeming "important to have a Fed leadership that enjoys broad bipartisan support."

With the appointment of a Republican as president of the Fed and of a Democrat as vice-president, Joe Biden hopes to spare the different sensibilities of his party, in the midst of negotiations for the adoption in Congress of his plan for social and environmental reforms. .

The appointment of the president of the Fed is, in terms of economy, one of the most important decisions of the mandate of the president of the United States.

Long awaited, it had however, this time, taken on a political aspect more than an economic one.

The Senate will now hear the two officials, then vote to confirm or not their appointments, first in the banking committee and then in plenary session.

Climate change

Jerome Powell assured Monday that the Fed would act so that inflation does not "take root".

He also mentioned the priority of fighting "against the evolution of risks linked to climate change", a change of tone which seems to have been dictated to him by the White House.

Joe Biden has indeed estimated that the American central bank should be "leader" in the taking into account of this risk, responding to the calls of the left wing of the Democrats, which called not to renew Jerome Powell because of his judged action too weak in this area.

Lael Brainard at the White House on November 22, 2021 JIM WATSON AFP

Lael Brainard, on the other hand, had made it one of his favorite themes.

During speeches, she mentioned the fight to be waged against inflation, but also the need to "support economic growth that includes everyone", and an "economy (which) is sustainable for future generations".

But some senators regretted the choice of Joe Biden, such as Democrats Sheldon Whitehouse and Jeff Merkley, for whom the president of the Fed must ensure the "protection of our financial system, and (share) the point of view of the administration according to which the fight against climate change is the responsibility of each policy maker ".

"This person is not Jerome Powell," they lamented in a statement Monday.

Senator Elizabeth Warren even announced that she would vote against his reappointment, citing her "regulatory, climate and ethical failures".

Diversity

Jerome Powell, 68, has headed the Fed since 2018. This lawyer and former multi-millionaire investment banker was appointed governor by Barack Obama in 2012, then promoted to president by Donald Trump in 2017. He should be supported. sufficiently wide in the Senate.

Lael Brainard, 59, is less consensual.

Her positions in particular in favor of strict banking and financial regulations could, if she had been appointed president, have cost her confirmation by the Senate, a failure that Joe Biden could not afford to risk.

Joe Biden with Jerome Powell and Lael Brainard, at the White House on November 22, 2021 JIM WATSON AFP

She will replace current Fed vice president Richard Clarida, whose term expires on January 31.

Other appointments to the Fed should be announced at the beginning of December, in particular for a key position of the institution, that of vice-president in charge of banking supervision.

The White House on Monday promised "more diversity".

The Fed, which is the most powerful central bank in the world, decides the country's monetary policy, and monitors and regulates the financial sector.

Its decisions can boost or slow down American economic activity by fixing the cost of credit, influencing the dollar and thereby all financial markets.

© 2021 AFP