President Biden will renominate Jerome H. Powell, the Federal Reserve chair, to another four-year term — ensuring policy continuity at a moment of rapid inflation and vast economic uncertainty but potentially angering progressive Democrats who had been agitating for a change in leadership.
The much-awaited decision was a return to tradition in which the central bank’s top official is reappointed regardless of partisan identity — a norm bucked by former President Donald J. Trump, who appointed Mr. Powell instead of renominating Janet L. Yellen.
It reflected a general view by Mr. Biden and his top aides that Mr. Powell has done well in supporting the economy through the pandemic recession and its halting recovery. It is also a bet that Mr. Powell is the right leader to steer the Fed through an economically and political treacherous storm of price increases, which administration officials are convinced will dissipate next year.
Mr. Biden will also nominate Lael Brainard, a governor whom many progressive groups had championed to replace Mr. Powell, to serve as the Fed’s vice chair. Renominating Mr. Powell — who won bipartisan support moments after the announcement — also spares the White House what might have been a bruising confirmation battle if the president had instead chosen Ms. Brainard, who has fewer Republican supporters in the Senate than Mr. Powell.
The stakes in the choice are unusually high.
Inflation has picked up sharply this year, with consumer prices increasing at the fastest pace in more than three decades in the year through October. The central bank is charged with keeping consumer prices stable while striving for maximum employment, and striking that balance could require difficult policy choices in the months ahead.
While taming inflation falls to the Fed, Mr. Biden has been suffering politically as prices rise for food, gas and airplane tickets. The president has repeatedly tried to reassure Americans that his economic policies will ultimately calm inflation, a message he is expected to repeat during remarks on Tuesday. His Fed decisions in recent weeks have become tangled in the politics of price increases, particularly as the president pushes Senate Democrats to coalesce around a $2.2 trillion climate change and social policy bill that Mr. Biden says will ease inflationary pressures in years to come but Republicans warn will stoke higher prices immediately.
Mr. Biden, who will also nominate Lael Brainard, a governor, to serve as the Fed’s vice chair, said he was certain that both Mr. Powell and Ms. Brainard would work to stabilize inflation and keep the economic recovery on track.
“I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable and delivering full employment will make our economy stronger than ever before,” Mr. Biden said in a statement on Monday.
Mr. Powell’s reappointment suggests that the White House, which has a chance to fully reshape the Fed, is not aiming to completely overhaul the…