U.S. President Joe Biden has re-nominated Jerome Powell as the next Federal Reserve chair, after much speculation that Fed Governor Lael Brainard could replace him to lead the central bank for the next four years.
Biden appears to have gone with the candidate who was better known to investors, while providing economic policy continuity. Powell helped to steer the world’s biggest economy through the COVID-19 pandemic, notably doubling the size of the central bank’s balance sheet to $8.7 trillion to stimulate global markets.
Bitcoin quadrupled in price in 2020 and has doubled so far in 2021, as a growing number of investors bought the cryptocurrency as a hedge against the inflation that might come as a result of so much money printing.
“That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery,” Biden said in a statement.
With Powell as chair and Brainard as vice chair, Biden said he expects that the duo will help keep the focus on low inflation, stable prices and provide more employment for the American people, as well as address Biden’s stance on climate change.
“Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system,” Biden added.
Powell vs. Brainard, and what it means for crypto
Economists have previously stated that differences between the two candidates’ positions – on both digital-asset regulation and economic policy – are so slight and finely nuanced that either choice likely wouldn’t have made a huge difference for the industry or cryptocurrency markets.
Despite Brainard being more outspoken about cryptocurrencies out of the two, generally speaking, both share a conviction that cryptocurrencies should not be allowed to grow unfettered to the point where they might threaten the existing financial system.
Moreover, both candidates were seen as monetary policy “doves” – meaning they would likely be more tolerant of inflation, if given a choice. That might be a positive for bitcoin given the cryptocurrency’s use by many investors as a hedge against rising prices.
The price of bitcoin has barely changed on Monday, hanging around $58,000, while ether, the native token of Ethereum, held its ground around $4,200.
Traders in traditional markets seem to have taken the news as a positive, with the S&P 500 up about 0.7% in early trading on Monday.
Jerome Powell was appointed as Fed chair by the Trump administration and took office in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire Jan. 31, 2028.