Many are expecting that Fed chair Jerome Powell will be renominated for another four-year stint, but it’s not a done deal
New York — A lack of news over US President Joe Biden’s pick for Federal Reserve chair is introducing unpredictability for investors at a crucial time, as the central bank prepares to taper its asset purchases and start hiking rates.
Still, it is not seen as a done deal. Biden is still weighing whether to keep Powell as chair or elevate Fed governor Lael Brainard to the post, an administration official said on Wednesday.Online betting website PredictIt gave Powell a 74% chance of being confirmed by the US Senate as of Thursday while the odds that Brainard would be nominated were 26%.
Whoever Biden nominates will first be vetted by the Senate Banking Committee before going to a vote in the full Senate, where a simple majority would be needed. Moreover, Powell’s current term, due to run out in February 2022, has proven positive for risk assets, with the S&P gaining 74.5% since his appointment on February 5, 2018 and hitting a series of new records in part helped by emergency measures the Fed launched in response to the coronavirus pandemic.
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