Centrist Democrat Backs Powell for Second Term as Fed Chair

(Bloomberg) -- A senior Democrat on the Senate Banking Committee endorsed Federal Reserve Chairman Jerome Powell for another term, countering pressure from some House progressives for President Joe Biden to pick a nominee more in line with their positions on regulation, inequality and climate risks. 

“As our economy continues to recover from one of the greatest economic crises in our history, we need a steady hand at the wheel – and Chairman Powell has been just that,” Senator Jon Tester of Montana said Wednesday. 

“He has served as a nonpartisan steward of the economy while skillfully helping guide our economy through this crisis, and he's proven that he won't bow to political pressure from either side of the aisle. That's why I believe he has earned a second term at the Fed,” Tester added. 

Tester's backing bolsters the chairman's bipartisan support. Tester is one of a few Democrats to win re-election in states won by former President Donald Trump. Montana's other senator, Republican Steve Daines, last month wrote a letter to Biden urging him to nominate Powell for another term.

Many Senate Democrats have said they plan to back whomever Biden chooses. But two key progressives, Banking Chairman Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts, have yet to endorse him. Both senators have sharply criticized Powell's moves to lighten regulations in recent years. 

Another Senate Democrat, Sheldon Whitehouse of Rhode Island, has raised questions about Powell's focus on climate change. Whitehouse tweeted last month Powell has “got to go” if he still wants to find a middle ground “between the warnings of science and the lies of the fossil fuel industry.”

Read More: Powell Gets Unlikely Boost With His Liberal Critics in Disarray

Tester's endorsement, first reported by the Wall Street Journal, underscores that Powell would likely have the easiest road to confirmation, despite pressures by some outside advocates for Biden to nominate a more liberal choice, like Fed Governor Lael Brainard, who has frequently dissented from regulations backed by Powell. Biden advisers are considering a recommendation that Powell be renominated with Brainard as vice chair for supervision, the key banking regulator position.

They note that other Fed positions, such as vice chair for supervision, lack the power of the chair over the central bank's agenda.

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