This could be the most important man in Washington

Fed: "Economic tragedy" if covid-19 is not controlled 0:59

(CNN Business) -

President Donald Trump or Joe Biden will have to make an incredibly important decision sometime in 2021 that will help determine whether the economy can continue its recovery from the covid-19 pandemic.

They will need to decide whether or not to appoint the president of the US Federal Reserve (Fed), Jerome Powell, to a second term.

Trump's decision to halt stimulus negotiations on Tuesday - before backing down slightly - shows that investors, consumers, and businesses may not be able to trust the White House and Congress for more. financial help.

But Powell and the Fed have done everything they can to prop up the economy.

The Fed quickly lowered rates to zero in March and has since launched loan programs amounting to trillions of dollars.

Powell's swift actions have drawn praise from many Wall Street economists and investment experts.

And they are a key reason there is hope that either Biden or Trump will appoint him to a second term as Fed chairman. His current four-year term will expire in February 2022.

“Powell should have a second term if he wants to.

He deserves credit for the speed and magnitude of the Fed's response to COVID-19, "said Larry Adam, chief investment officer at Raymond James.

The vision of the candidates

Questions about Powell and the future of the Fed did not surface in the presidential debate last week.

And spokespersons for both candidates did not comment to CNN Business on whether or not they would re-nominate Powell for a second term as Fed chairman.

Trump had been critical of Powell before the pandemic for not moving fast enough to lower rates.

However, he has since praised the Fed chief's response to COVID-19.

Biden has not made specific comments about Powell's future.

But he already tweeted that he would ask Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, to stay and help manage the response to the pandemic if elected, so he might feel the same about Powell and his response. economic to coronavirus.

• LOOK: These are the visions of Biden and Trump for the US economy.

'Powell has done a good job.

He has been very decisive and has responded quickly and without hesitation, "said George Calhoun, Professor of Quantitative Finance at the Stevens Institute of Technology.

“When the crisis hit, Powell did his best and turned on the taps.

I'm not sure how rational it would be to have someone totally different at the Federal Reserve.

Monetary policy has been effective, ”Calhoun added.

Biden's former boss faced a similar decision after the 2008 election. President Barack Obama decided to stay with Fed Chairman Ben Bernanke, who was first appointed by President George W. Bush.

Obama proposed him for a second term in August 2009, so he could continue to lead the Fed's response to the global financial crisis and the Great Recession.

"If Trump wins, Powell should be the choice, and Biden would probably want to keep it going.

We need lower rates for longer, ”Adam said.

Nikki Carvajal and Sarah Mucha, both from CNN, contributed to this report.

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