Biden Renominates Powell: A Win for Central-Bank Independence

President Biden announces the nomination of Federal Reserve Chair Jerome Powell for a second four-year term in Washington, D.C., November 22, 2021. (Kevin Lamarque/Reuters)

The Fed chief isn’t perfect, but Jerome Powell has consistently demonstrated the most important characteristic for central bankers: independence from elected politicians.

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J
oe Biden nominated Jerome Powell to lead the Federal Reserve for another four-year term today.

Biden was facing pressure from some progressive senators, including Elizabeth Warren, Jeff Merkley, and Sheldon Whitehouse, to nominate someone else. By not giving in, Biden prized the Fed’s independence over pleasing some members of his own party. For that he deserves commendation.

If we want to have a chance at bringing inflation back down, we need a central bank that is independent of elected politicians. It’s a widely accepted finding in economics research that central-bank policy controlled or heavily influenced by elected officials will have an inflationary …