The Second-Most Powerful Person in the World

by Brenner Cobb, Editor

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As Federal Reserve Chairman Jerome Powell’s first term approaches its end in February 2022, the debate over the policymaker’s reappointment heats up. President Biden is responsible for making the decision over whether to re-nominate the popular Trump-era Powell and is under increasing pressure from the more progressive wing of the Democratic Party to nominate a different, more climate-focused individual to lead the Federal Reserve’s Board of Governors.

Above: Jerome Powell. Credit to The Atlantic.

The power wielded by the Chair of the Federal Reserve (Fed. chair) is so great that many in Washington refer to the person who occupies the position as the second-most powerful person in the world, falling just behind the President of the United States. The Chair’s powers allow them to play a pivotal role in shaping the monetary policy of the United States government, and, due to the intertwined nature of national economies in today’s age, the power to greatly affect the economic prosperity of other nations. In a notable departure from the strategies of previous Fed. chairs who placed a high focus on controlling inflation, Powell has used his powers to target unemployment and promote a higher degree of workforce participation.

While the opposition to Powell’s reappointment finds sympathetic voters on both the political left and right, his chairmanship has been widely popular. Powell is one of few figures in American political life who enjoys support from both sides of the aisle. Some right-leaning writers, such as Ramesh Ponnuru of Bloomerg, credit him with leading the Federal Reserve to provide the national economy with needed support during the pandemic. Those who lean to the left, such as Catherine Rampell of The Washington Post, praise Powell’s tendency to resist former President Trump’s efforts to “bully” him and appreciate his efforts to help low-income workers, many of whom are people of color.

Opponents of Powell’s reappointment include Reps. Alexandria Ocasio-Cortez (D-NY), Ayanna Pressley (D-MA), and Rashida Tlaib (D-MI), who criticize Powell’s unwillingness to address climate change more directly. Left-leaning economists have also suggested that the Fed incorporate more simulated climate-change induced disasters in its regular stress tests of banks and the economy as a whole. Some of Powell’s fellow Republicans have criticized his more relaxed attitude towards inflation and argue that post-pandemic inflation should be watched more closely.

Commentators and writers from across the political spectrum currently expect President Biden to re-nominate Powell for a second term as Chairman due to his diverse group of supporters. However, the nation’s economy is still recovering from the COVID-19 pandemic, and there are several months to go before Powell’s term expires. The debate over his reappointment is likely to continue until the day his term expires.

Note: all op-ed articles do not necessarily reflect the views of The Knight's Post or Greenfield School.