Analysis: Biden's Fed pick reflects political balancing act

WASHINGTON (AP) — By picking Jerome Powell to stay on as chair of the powerful Federal Reserve, President Joe Biden is trying to navigate hazardous crosscurrents between economic and political forces.

Monday's announcement frustrated a trio of liberal Democrats who see Powell as too weak on financial regulation and climate change. It drew praise from several Republican senators whose votes will be needed to get him confirmed in the evenly split Senate. But the underlying issue is whether the Fed’s often subtle messages and changes in interest rates can translate to a renewed sense of optimism by voters about the economy.

Biden's goals are easy to describe but difficult to achieve.

He needs to tamp down inflation — the rising prices that have Americans so upset — but not so much that it suffocates a strong burst of hiring. He wants to forge bipartisan agreements, though not at the expense of his policy vision. He must put Democrats in the best position to compete in the 2022 midterm elections, yet his coalition is so diverse that it naturally invites infighting that can turn off voters.

Biden chose to nominate Powell to a second term in the belief that the 68-year-old's political independence and experience during the pandemic will give Americans a sense of security. He balanced the choice politically by announcing that he wanted to elevate Fed Governor Lael Brainard to vice chair, a choice that could comfort some of the president's progressive Democratic critics.

“We need people with sound judgment and proven courage to preserve the independence of the Fed," Biden said at the White House. "We need people of character and integrity who can be trusted to keep their focus on the right long-term goals for our country.”

The president started with the questions of who he...