House Budget chief praises Powell as Biden mulls replacement

House Budget Committee Chairman John Yarmuth (D-Ky.) all but formally endorsed Federal Reserve Chairman Jerome Powell for another term amid growing liberal pressure on President Biden to replace him.

In a Thursday statement, Yarmuth praised Powell for pushing aggressively for a full recovery from the pandemic-driven recession and expressed concern about a sudden change atop the Fed. 

While Yarmuth did not explicitly say Biden should renominate the Fed chief, his statement was a clear defense of Powell as the president mulls what to do with a chance to reshape the bank.

“Chair Powell has led the Federal Reserve with a steady hand through a time of severe crisis in our nation. As we work to Build Back Better and ensure broadly shared prosperity for generations to come, Chair Powell’s dedicated commitment to the new monetary policy framework prioritizing inclusive full employment will help our nation achieve an equitable recovery, ensuring no community or corner of the country is left behind,” Yarmuth said.

“As our nation and economy continue to face uncertainty, a consistent and focused Federal Reserve is critical,” he continued.

The House doesn’t vote on presidential nominations, but Yarmuth’s statement is a notable measure of support for Powell among Democrats, who are squabbling over Biden’s pending decision.

Powell’s four-year term as Fed chair expires in February and Biden is expected to announce soon whether he’ll renominate a Republican with broad bipartisan support, or side with progressive lawmakers and activists pushing for a new chairman.

While Powell’s supporters on the left say his success in pushing the Fed toward a maximum employment philosophy is crucial as the economy recovers, his detractors say the Fed chief’s support for looser financial rules and measured actions on climate change undermine his otherwise solid policy positions.

A group of progressive Democratic lawmakers led by Rep. Alexandria Ocasio-Cortez (N.Y.) wrote a Monday letter to Biden urging the president to pick a new Fed chair who is willing to take more aggressive steps to fight climate change and racial inequities. A broad coalition of climate and progressive activists groups have also called out Powell’s record, though not all have explicitly called on him to be replaced.