Federal Reserve chairman up for reappointment


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Faeyah Muhammad

As February 2022 approaches, concerns and speculations continue to arise regarding the potential reinstatement of Jerome Powell as the Federal Reserve chairman.

A chairman holding just one fouryear term is not common in American history since oftentimes, a Fed chair is reappointed for several four-year terms regardless of if the political party they are affiliated with is that of the current president’s or not.

Prior to February 2018, Janet Yellen was chair of the Fed.  However, she was in office only for  one term before being replaced by Powell as per former President Donald Trump’s invocation.

Reputable economists and financial advisors have expressed support for Powell’s reinstatement as they believe Powell can make important decisions for the country’s economy without being personally swayed by his own political beliefs as a Republican. Powell represents an “independent chair,which the country needs in contrast to a political one,  Roberto Perli, a former Fed economist, stated.

President Joe Biden has also expressed his support and trust in Powell, and there have been many implications that White House aides were also supportive of Powell’s reinstatement.

As of now, the only serious potential competitor is Lael Brainard, a member of the Fed’s Board of Governors. Brainard is projected to have a 23% chance of winning, a far reach from Powell’s 72% chance. Brainard has the left-leaning progressive views that Democrats are looking for in a future Federal Reserve Chair.

Democrats, primarily, are expressing the most concern about Powell’s possible reinstatement. Most of these concerns come as a result of the recent Fed trading scandal in which Robert Kaplan and Eric Rosengren, former heads of Fed Bank of Dallas and Fed Bank of Boston respectively, traded securities amidst the pandemic crisis, demonstrating to many that Powell is incompetent since this occurred under his leadership period.

Sen. Elizabeth Warren also expressed her view against voting for the reinstatement of Powell stating that his record shows a lack of qualification for the role. Warren and other Democratic party members argue that Powell’s deregulation of Wall Street puts taxpayers at risk, and that Powell’s current performance is solely the result of luck.

Certain Democrats have argued that a more suitable candidate would be one that shares left-leaning progressive views and shifts economic focus to issues such as climate change, gender inequality and racism. They also want to see a woman or a person of color taking the lead instead to better assess and solve future issues.