Powell has faced opposition from progressives
Progressive critics, including Sen. Elizabeth Warren, D-Mass., have accused Powell of watering down bank regulations adopted in the aftermath of the financial crisis. At a recent Senate Banking Committee hearing, Warren described Powell as "a dangerous man."
That criticism failed to get much traction, though. The co-sponsors of the Dodd-Frank law behind those bank regulations, former Sen. Chris Dodd, D-Conn., and former Rep. Barney Frank, D-Mass., have defended Powell and said he deserves a second term.
Powell has also had to navigate an ethics controversy, after reports this fall that two former presidents of regional Federal Reserve banks actively traded stocks and other securities last year, at a time when the central bank was heavily involved in financial markets.
The Federal Reserve imposes new restrictions on investments after trading controversy
ECONOMY
The Federal Reserve imposes new restrictions on investments after trading controversy
Former Dallas Fed president Robert Kaplan and former Boston Fed president Eric Rosengren retired last month, after the trades came to light. Both men have denied any wrongdoing, but Kaplan acknowledged the controversy could be a distraction for the central bank. Rosen said he was stepping down for health reasons.
The Fed's inspector general is reviewing the two men's trades, which appear to be in compliance with the central bank's rules at the time. The Fed has since adopted stricter rules, which limit the trading of individual stocks and bonds, and require disclosure of any trades within 30 days.
"We have to have the complete trust of the American people that we're working in their interest all the time," Powell said, in describing the new rules.
In nominating Powell for a second term, Biden is observing a tradition that Fed chairs typically don't change, even when the party in control of the White House does. That's one way to safeguard the central bank's political independence. Trump broke with that tradition when he replaced then-Fed chair Janet Yellen, a Democrat who is now Treasury Secretary, with Powell four years ago.
Powell's nomination is subject to confirmation in the Senate, where he is expected to get broad, bipartisan support.