President Biden must select a new Federal Reserve chair, and the process may have grown a bit more complicated, reports Bloomberg. What was once an easy, almost shoo-in renomination of current Chair Jerome Powell has "morphed into a problem for the White House" amidst strong criticism from Sen. Elizabeth Warren (D-Mass.) and ire from progressive groups over trading activity.
"The growing trading scandal at the Fed definitely impacts Powell's renomination," but "whether it will be enough to derail it remains unseen," said Aaron Klein, a former deputy assistant secretary at the Treasury Department under the Obama administration. The Fed is under fire over equities trades made by top officials under Powell's leadership.
On top of that, Warren has come out against Powell directly, calling him a "dangerous" leader who is "soft on banks and on the ethical practices of those who work for him," writes Bloomberg. The other leading Fed chair candidate, Lael Brainard, has views that align more directly with Warren's.
And despite the fact that Warren's criticisms and the current scandal reportedly haven't directly affected Powell's standing with the White House, and that Treasury Secretary Janet Yellen has endorsed him, Powell's renomination might also "irritate progressives in the midst of sensitive negotiations of [Biden's] multitrillion-dollar social spending package," writes Bloomberg. Ideally, the White House would nominate its candidate for February appointment by late October or early November.
Warren aside, Powell has the support of an otherwise "unsually wide" group, and could still be confirmed if he were renominated, "thanks to widespread support among Republican lawmakers," writes Bloomberg. Ultimately, the nomination decision is Biden's, a point Yellen echoed on Tuesday: "It's up to the president to make the nomination, and the president hasn't yet made that decision."