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Biden chooses to keep Fed Chairman Powell in place for a second term

A MARTINEZ, HOST:

Inflation is as high as it's been in more than three decades so President Biden went with stability for his pick to lead the Federal Reserve, and he's tapped Fed Chairman Jerome Powell to stay on for a second four-year term. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Biden says Powell's steady and decisive leadership when the pandemic struck helped pave the way for the country's rapid economic rebound. But with that turnaround has come a new challenge - prices that are now climbing at the fastest pace in more than 30 years. Biden acknowledged many families are struggling to keep up with the growing cost of food and gasoline. He says it's the Federal Reserve's job to keep a lid on inflation while also encouraging a return to full employment.

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PRESIDENT JOE BIDEN: To meet these goals, it's going to require patience, skill and independence.

HORSLEY: Powell, a Republican was initially appointed Fed chair by former President Donald Trump. And he enjoys strong bipartisan backing in the Senate. Some progressive Democrats hoped Biden would appoint Fed Governor Lael Brainard to lead the Central Bank. But Biden tapped Brainard as vice chair instead. Brainard says she looks forward to working with Powell to build a durable recovery.

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LAEL BRAINARD: This means getting inflation down at a time when people are focused on their jobs and how far their paychecks will go. It means supporting a growing economy that includes everyone.

HORSLEY: By leaving a Republican in the top Fed job, Biden gives the central bank some insulation from partisan politics. But while the president says he respects the Fed's independence, Biden also says he got assurances from Powell that the Fed will be proactive in financial regulation and addressing the risks to the financial system posed by a changing climate. Biden will soon have three more vacancies to fill in the seven-member Fed board. The president says he'll use those picks to bring new perspectives and new diversity to the central bank's leadership, which Biden calls much needed and long overdue. Scott Horsley, NPR News, Washington.

(SOUNDBITE OF FILA BRAZILLIA'S "AIRLOCK HOMES") Transcript provided by NPR, Copyright NPR.