Jerome Powell, also known as Jay Powell, is the current chair of the Federal Reserve (the Fed).  He was actually nominated to the Board of Governors in 2012 by Barack Obama.  He became Fed chair in 2018 after being nominated by Donald Trump.

Joe Biden has now renominated Powell for a second term.  He still has to be confirmed by the Senate.

We should expect that Powell will easily be confirmed, but it will be interesting to see just who opposes his renomination.  It may be one of those situations where the harder core right wing and left wing vote together in opposition.  Meanwhile, you can fully expect Mitt Romney and Chuck Schumer to vote in unison in supporting Powell.

According to Biden and his supporters, Trump is the worst human being on earth, so it may be a bit curious why Biden would keep a Fed chair who was put in place by Trump.  It is probably because Trump heavily criticized Powell once in office.

Unfortunately, the reason Trump criticized Powell wasn’t for the right reason.  Although Trump mentioned a bubble stock market fueled by low interest rates (courtesy of the Fed) when he was running for office, the script changed quickly once Trump became president.  He then criticized Powell for being too tight with interest rates.  Trump didn’t want anything to risk his beloved economy and stock market boom (which was no longer referred to as a bubble).

Trump appointed a lot of bad people, and Powell is no exception.  With that said, he wasn’t the worst appointment either. I don’t necessarily think Powell was a Trump enemy like John Bolton, Christopher Wray, and even the fake Mike Pompeo.  Trump appointed a bunch of war hawks and criminals who made sure to stomp out any idea of world peace.

In this sense, Jerome Powell was better.  The Fed chair is not part of the president’s cabinet as many of the other appointments are, but the president obviously wants someone as an ally.  For Fed chair, it really probably didn’t matter who Trump appointed, as it would have been a Keynesian hack.  If Trump had nominated someone like Judy Shelton as Fed chair, the Senate wouldn’t have confirmed her.

With Powell staying on as Fed chair, it will be business as usual.  But it would have been business as usual even if it had been someone different.  This means that we will continue to see monetary inflation, interest rate tampering, and bailouts when deemed necessary.  It also means that Congress will continue to be subsidized in its deficit spending.

It should be clear by now that nothing is going to change at the Fed except when economic conditions change.  The price inflation numbers have certainly gone up this year, and most Americans are recognizing it.  How long will this be tolerated?

Although most Americans don’t fully understand inflation, I think many have a sense that the Federal Reserve, as central bank, has some kind of role.  They also sense that it is related to government spending, even if they can’t quite articulate it.

The only thing that will force the Fed to scale back (i.e., stop inflating) is significantly higher price inflation.  If we officially hit double-digit annual price inflation, it will be difficult for the Fed not to pull back.

This will mark the end of the stock market boom, at least for a while.  Maybe the stock market boom (bubble) is already coming to an end in anticipation of this.

If things go bad quickly, it will be interesting if Biden tries to pin the blame on Powell.

Trump nominates Powell, and then Trump criticizes him.  Biden nominates Powell, and then Biden criticizes him.

Of course, if the economy gets bad quickly, then Biden will be taking a lot of the blame as president.  His approval ratings are already in the tank even with the stock market hitting all-time highs.  Imagine if stocks fall 30% or more.  Biden’s wife may have to trick him to leave the White House with some ice cream and then quickly flee the scene with him.

Kamala Harris is the one person even more unpopular than Biden.  Maybe she can blame Powell too.  If she does that, Powell’s popularity may actually rise.

We’ll see if it’s possible to ever get someone somewhat reasonable back in the position of Fed chair.  For all of his faults, Paul Volcker was about as decent as you can get in that position.

If someone like Volcker came in now and did what he did, we would see the Everything Bubble pop in spectacular fashion.