Who is Federal Reserve Chair Jerome Powell and how was he chosen?
The Fed’s Board of Governors is a group of 14 people who control the US central bank. But how is its leader chosen and for how long do they serve?
On Wednesday the Federal Reserve opted to impose a substantial increase to its interest rates in the hope of cooling the red-hot American economy. The move was announced by Fed Chair Jerome Powell at a press conference.
The Federal Reserve is led by a 14-person Board of Governors, of which Powell is currently the Chair. The 69-year old was first nominated to the Board of Governors by President Barack Obama in 2012 and he took office as the group’s Chair in 2018, during the Trump presidency. He was sworn in for a second four-year term in May 2022.
Who is Jerome Powell?
Powell was born in Washington DC in 1953 and was one of six children. His father, also named Jerome, was a lawyer in a private practice and his maternal grandfather had been Dean of the Columbus School of Law at Catholic University of America.
He first received a bachelor’s degree in politics from Princeton University before studying law at Georgetown University. He graduated from Georgetown in 1979, having been editor-in-chief of the Georgetown Law Journal during his time there.
He worked in a variety of commercial banks as a lawyer for the 1980s, rising to the position of Vice President at investment bank Dillon, Read & Co. He first made a move into public service in 1990 when he worked at the US Department of Treasury, becoming Under Secretary of the Treasury for Domestic Finance under President George H. W. Bush.
After a stint working again in the commercial world, Powell returned Washington DC after graduating and took up a post as a visiting scholar at the Bipartisan Policy Center.
In 2011 Powell, along with Jeremy C. Stein, was nominated to the Federal Reserve Board of Governors by Obama, despite being a Republican. Powell took office in May 2012 to complete the term of Frederic Mishkin, who had resigned. He was sworn in for his own 14-year term in June 2014.
How is the Fed Reserve Chair chosen?
Both the Chair and Vice Chair of the Board are appointed by the President, but also have to be confirmed by the Senate. They serve only four-year terms in the role but are able to be reappointed at a later date, as was the case with Powell.
The Chair must be drawn from the 14-person Board of Governors. Each member serves a 14-year stint in the Fed Reserve and they may not be reappointed after completion. The only exception is, as was the case with Powell, the Board member was initially put in the role to complete the term of a former member who left before their own term had expired.