Replacing Powell Would Be an Unforced Error
Both macroeconomic and political considerations suggest Biden should give the Fed chair another term.
Replacing Fed Chariman Jerome Powell would be the wrong call.
Source: Bloomberg
At the start of July, Politico reported that Federal Reserve Chairman Jerome Powell would probably be reappointed. The headline: “‘Jay’s job to lose.’” Just two weeks later, though, it's looking like less of a lock. Major news outlets are reporting that President Joe Biden is considering whether to install a new chairman when Powell’s current term expires in February, and might even be leaning in that direction.
It’s understandable that Biden would want his own appointee in the country’s top economic policymaking position, and that many Democrats would prefer someone more enthusiastic about financial regulation than Powell is. But replacing Powell now would be the wrong call at the wrong time.