Americans' personal bearer of bad inflation news, Jerome Powell's first four-year term as chair of the Federal Reserve has been wrought with economic potholes. His term is set to expire in 2022. People across the U.S. wonder if President Biden will replace Powell.
Expert economists think that Biden will reappoint Powell, but will the reality align with expectations?
Jerome Powell was instated as Fed chair under Trump.
Former President Trump swore in Jerome Powell as Fed chair in 2018. Powell is a lifelong Republican, so the move wasn't a surprise.
In 2021, Democrats have control of the White House and Congress, which expands the potential outcomes for the next Fed chair term outside of the Republican scope.
Former Fed chair Janet Yellen served under the Obama administration. Shortly after Biden's inauguration, he appointed Yellen as Secretary of the Treasury. Yellen is a Democrat, and this carryover from Biden's vice presidency wasn't a shock to the status quo.
Jerome Powell's term as Fed chair ends next year
Fed chair terms last four years. Powell's term is set to end in 2022, which means Biden has just a few months to make a decision on whether to replace or reappoint him.
Economists expect a reappointment for the current Fed chair.
Following a poll of 40 economists, 96 percent said that they don't think Biden will replace Powell as Fed chair. They think that Biden will reappoint him.
U.S. macro-economist Jim O'Sullivan told reporters the reason for the sweeping consensus is that "if you're seen as doing a decent job for continuity then the president kind of re-appoints, even if it was a president of a different party that appointed him in the first place."
Powell navigated the muddy waters of the COVID-19 pandemic and Trump's presidency simultaneously. He arguably contributed to the fact that the 2020 recession lasted just two months—the shortest recession in U.S. history.
Keep in mind that this poll, made up of economists, isn't the be-all-end-all for Biden's Fed chair decision. The position could just as easily go to Lael Brainard, the former Under Secretary of the U.S. Treasury for International Affairs and a Democrat. While some people say that political parties don't make a difference in Fed chair decisions, Biden has proven his intent to differentiate himself from Trump at expansive costs.
Will Jerome Powell be renominated by the Biden administration?
Biden's decision on whether or not to replace Powell will become clearer over the next few months.
Following the decision, Biden will also have to determine whether to reappoint Vice President for Supervision Randal Quarles before his term ends in 2022. There's also Richard Clarida, whose term as a board member is ending. Biden will likely fill his role as well as the currently vacant spot left empty under the Trump administration.
Ultimately, the Fed has the potential to go through a real shift next year, whether or not Biden replaces Powell.