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Joe Biden’s advisers are considering a recommendation to the president that would pair a second term for Jerome Powell as Federal Reserve chair with the nomination of Lael Brainard as the central bank’s chief regulator, people familiar with the matter said, a plan that could assuage progressives resistant to Powell.
Biden has not yet weighed in on Fed personnel decisions and his decision is not expected until fall, the people said.
Brainard is also a contender for the Fed chair position, but her elevation to vice chair for supervision, replacing Randal Quarles, could soothe progressive Democrats who have raised concerns about Powell’s record on regulation.
Powell maintains broad support inside the White House and from Treasury Secretary Janet Yellen, to remain as chair. Still, Biden has previously made the less obvious choice for key economic posts. In November 2020, he chose Yellen to be his Treasury chief, despite having seriously considered Brainard, surprising even some on his transition team.
A Fed spokesperson declined to comment.
Brainard has staked out a different approach toward financial regulation and the adoption of a central bank digital currency.
Brainard would be the Fed’s second vice chair for supervision if she gets the position, which was created by Congress in the wake of the financial crisis.
The job was envisioned as a way to bolster the Fed’s oversight of Wall Street, but Quarles has angered Democratic lawmakers by tilting away from tough post-crisis reforms. His stint as a vice chairman expires in October.
Biden has four upcoming openings on the Fed. A White House official said that the president is consulting with his economic team in a “careful and thoughtful process” to appoint a Fed chair. The official also said he would pick someone he believes to be effective in implementing monetary policy.
(Updates with Fed declining comment in fifth paragraph)
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