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The US Federal Reserve. Image © iStock

Biden praised Powell’s independence and his stewardship of the central bank through the Covid-19 crisis, and backed him to deal with the high inflation taking a toll on the US population.

“At this moment of both enormous potential and enormous uncertainty for our economy, we need stability and independence at the Federal Reserve,” said Biden.

“Jay [as Powell is also known] has proven the independence that I value in the Fed chair.”

Powell took up the role in 2018 after being nominated by Trump, who in a later interview with the Wall Street Journal said he “maybe” regretted the move after the Fed raised interest rates.

“In the last administration, he stood up to unprecedented political interference and, in doing so, successfully maintained the integrity and credibility of this, his institution,” said Biden.

“It’s just one of the many reasons why Jay has support from across the political spectrum.”

The president said Powell’s priorities will include mitigating the risks climate change poses to the financial system and economy and taking a more proactive role in ensuring financial regulations stay ahead of emerging risks such as cryptocurrencies.

He also said Powell, and his vice-chair nominee Lael Brainard, the only Democrat on the Fed’s board of governors, will be able to lead the central bank through the period of high inflation, which has reached 6.2% – its highest level in more than 30 years.

“We know that high inflation takes a toll on families, especially those less able to meet the higher costs of essentials like food, housing, and transportation,” said Powell.

“We will use our tools both to support the economy and a strong labour market, and to prevent higher inflation from becoming entrenched.”

Their terms, which are subject to approval by Congress, will last for four years.