Mr. Powell is facing down progressive pushback and an ethics scandal as the White House considers his future.
By Jeanna Smialek and Jim Tankersley
As Jerome H. Powell’s term as the chair of the Federal Reserve nears its expiration, President Biden’s decision over whether to keep him in the job has grown more complicated amid Senator Elizabeth Warren’s vocal opposition to his leadership and an ethics scandal that has engulfed his central bank.
Mr. Powell, whose four-year term as chair expires early next year, continues to have a good chance of being reappointed because he has earned respect within the White House for his aggressive use of the Fed’s tools in the wake of the pandemic recession, people familiar with the administration’s internal discussions said.
But the decision and the timing of an announcement remain subject to an unusually high level of uncertainty, even for a top economic appointment. The White House will most likely announce Mr. Biden’s choice in the coming weeks, but that, too, is tenuous.
The administration is preoccupied with other major priorities, including passing spending legislation and lifting the nation’s debt limit. But the uncertainty also reflects growing complications around Mr. Powell’s renomination. Ms. Warren, Democrat of Massachusetts, has blasted his track record on big bank regulation and last week called him a “dangerous man” to lead the central bank.
She has also taken aim at Mr. Powell for not preventing top Fed officials from trading securities in 2020, a year in which the central bank rescued markets, potentially giving the officials privileged information. Two regional presidents traded for their own profit in assets that the Fed’s actions could have influenced, according to recent disclosures. And Richard H. Clarida, the Fed’s vice chair, moved money from bond funds into stock funds in late February 2020, just before the Fed hinted that it would rescue markets and the economy.
“It is not clear why Chair Powell did not takes steps to prevent these activities,” Ms. Warren said during a Senate floor speech on Tuesday, after sending a letter on Monday calling for the Securities and Exchange Commission to investigate whether the transactions amounted to insider trading. “The responsibility to safeguard the integrity of the Federal Reserve rests squarely with him.”
Asked on Tuesday whether he had confidence in Mr. Powell, the president said he did but that he was still catching up on events.
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