Powell and the case of the disappearing punchbowl

Now that President Joe Biden has nominated Jerome “Jay” Powell for another term as chairman of the Federal Reserve Board, his friends face a conundrum. Send him congratulations? Or condolences?

It’s a nice gig, no question. As manager of the supply of the world’s reserve currency, the US dollar, the Fed chair is one of the world’s most powerful men. And Powell can feel complimented that a Democratic president picked him, a Republican, over the well-qualified Democrat some Democratic senators were backing.

In announcing his choice, Biden praised Powell for preserving the Fed’s independence. “Why am I not picking fresh blood or taking the Fed in a different direction?” Biden said. “Put directly, at this moment of both enormous potential and enormous uncertainty for our economy, we need stability and independence at the Federal Reserve. Jay has proven the independence that I value.”

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