President Joe Biden faces one of the key economic policy decisions of his presidency, expected this week as he decides who will run the Federal Reserve when Chairman Jerome Powell's term expires in February.
Biden has signaled that he is looking for continuity in Fed policy as he contemplates reappointing Powell for a second four-year term or establishing Governor Lael Brainard, who has been a strong supporter of the central bank's interest rate policy for the past four years.
Instead, the presidential election might be political rather than economic, as Powell's candidacy divided progressive Democrats and led to competing views within the Biden administration.
Biden's senior advisors remain focused on securing Democratic support for their $ 1.85 trillion health, education and climate protection package, approved by the House of Representatives last week. The intra-party split over the Fed's decision has made their political calculation difficult as they seek to narrow the Democrats' differences over the spending package, according to people familiar with the matter.
Senator Jon Tester, D-Mont., Said Sunday that it would be a mistake on Biden not to rename Powell. "I think he would be endorsed by a wide margin if the president appoints him," Tester said on NBC's Meet the Press, arguing that Powell has a "proven track record."
An expanded version of this report appears on WSJ.com.
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