Here's the twist: Joe Biden nominated Jerome Powell for a second term


US stock indices ended Monday with a fall. However, such a fall cannot be said to be the beginning of a correction. Just an ordinary day, during which stock indices did not rise as usual, but declined. Therefore, at the moment, it is still impossible to conclude that the upward trend for the US stock market is over. There were a few important and interesting events on Monday. However, there was something that the markets could not ignore.

Joe Biden has finally announced the name of a candidate for the post of head of the Fed. And Jerome Powell became it, contrary to expectations. Recall that in recent months, rumors have been actively exaggerated that a member of the Fed board, as well as the only Democrat in its composition, Lael Brainard, will become the new chairman. She even managed to pass an interview in the White House (very successfully), which significantly increased her chances of becoming the head of the Fed. But we can say that at the last moment, Joe Biden changed this decision and nominated Jerome Powell for a second term. From our point of view, this is the right decision. It should be remembered that Powell led the US central bank during the pandemic, as well as after it (so to speak). It was Powell who guided the American economy through two of the most difficult years for it. Now it is impossible to say with certainty that the pandemic has been left behind. A vivid example of this is the European Union, where countries are again beginning to close for quarantine, and Christine Lagarde openly says that the European economy is still too weak to cancel the stimulus. Therefore, no one knows what will happen in the States in a month or six months. No one knows how many more new strains will appear in the world, either. But Jerome Powell, if necessary, already knows what needs to be done to counteract the decline of the economy as a result of a severe epidemiological situation.

In a corresponding statement, the White House said so: over the past 10 months, 5.6 million jobs have been created, and the unemployment rate has dropped to 4.6%. The presidential administration believes that these results are Powell's merit. Lael Brainard has been nominated for the post of deputy governor of the Fed. The White House noted that she is one of the strongest macroeconomists in the United States, so she is worthy of this post. It should also be noted that both economists are adherents of a "soft" monetary policy, which is what Joe Biden and the Democrats want to achieve. However, now it is still necessary for Congress and the Senate to vote "for" Jerome Powell. And here, an interesting situation may arise in which Democrats will refuse to vote for Powell, since he has been repeatedly criticized by them in recent months, and is also a Republican. On the other hand, Republicans are likely to vote for Powell, so the current head of the Fed is likely to gain the necessary number of votes.

The material has been provided by InstaForex Company -

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