Senators gauge potential Fed chair candidates as Biden Reuters approaches

By Jonnelle Marte and Ann Saphir

(Reuters) – As President Joe Biden’s decision to appoint a Federal Reserve president approaches, action on the issue continued to grow in the U.S. Senate on Friday, which should confirm the possibility that a leading moderate Democrat was looking for time with potential candidates. and two other progressive lawmakers expressing opposition to incumbent Jerome Powell.

In the absence of a decision, lawmakers have weighed in on two well-known candidates: Faith Governor Powell and Lael Brainard. The White House said on Friday that there will be “more to report early next week” about Biden’s decision, which has become more important because inflation has reached 30-year highs and eroded the Democrat’s reputation in the first term.[nW1N2S304H]

Sen. Joe Manchin, a West Virginia Democrat who has yet to decide which candidate to go to, wants to meet with Brainard and would like to hold a follow-up meeting with Powell after speaking with him on Wednesday, according to a Bloomberg report.

Two progressive Democratic senators, Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon, made a joint statement on Friday against Powell’s appointment, saying he has not done enough to tackle climate change, an issue that Fed officials are addressing from financial stability and regulation. view.

“President Biden must appoint a Fed Chairman who will ensure that the Fed fulfills its mandate to protect our financial system and shares the Administration’s view that the fight against climate change is the responsibility of all those responsible,” the note read. “That person is not Jerome Powell.”

Powell is seen as having a clearer path to confirmation, with the help of Republicans like Senator Pat Toomey, who has stated they will oppose Brainard, as well as Democrats like Jon Tester, who reaffirmed his support for the incumbent on Thursday.

In the betting markets, Powell’s shares fell as predicted by PredictIt’s online forum traders as a 62% affirmative option, compared to Brainard’s 40%.

Manchin said Thursday that he looked favorably on the possibility of Powell becoming president of the Fed after both talks and discussed views on inflation, according to a spokesman.

Manchin first supported Powell’s appointment, but recently expressed concerns 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 Fed chair candidate ahead of next Thursday’s Thanksgiving holiday, with Friday’s comment about White House time confirming that timeline. It’s not clear that Biden needs the help of three Democrats to accept his Fed seat candidate.

Few distinguish between Powell, a Republican who was ousted by Donald Trump’s predecessor Biden, and Brainard, a Democrat nominated by Fed Chairman Barack Obama from a political standpoint. Both are generally in favor of a more tolerant view of high inflation, giving the labor market more time to continue to heal from the sides provided by the COVID-19 pandemic. There are 4.2 million fewer Americans on a corporate or government payroll than in February 2020.

But the continued level of inflation sparked by the reopening of the economy – and by far surpassing the Fed’s 2% target – has complicated the picture and is raising concerns among politicians, including Biden. Consumer sentiment has declined – as has Biden’s approval rating – which could change the White House’s calculation of which of the two is seen as firmer and earlier steps to bring the price-raising march to the holiday.