There are few apparent policy differences between the two top candidates to lead the US Federal Reserve, but that doesn't mean the decision will be an easy one for President Joe Biden.
He could reappoint Jerome Powell, a Republican who has won praise from officials in Biden's Democratic administration, or oust him in favor of Lael Brainard, whom progressive Democrats believe would be tougher on banking regulation.
"It's politics, politics, politics," said Jay Bryson, chief economist for Wells Fargo's corporate and investment bank.
Biden met with both candidates recently, according to US media, and a decision could come as soon as this week.
Regardless of whom he chooses, economists say the central bank is unlikely to shift its policies anytime soon, as a wave of inflation hampers the economy's recovery from the pandemic downturn and sends Biden's approval rating slumping.
"In terms of monetary policy, we think there's very little daylight between Powell and Brainard," Bryson said.
- Change or continuity? -
Under Powell, the Federal Reserve has been at the center of the country's response to the pandemic, slashing its benchmark lending rate to zero and pledging to keep it there for longer than normal to help the economy regain maximum employment.
But a price surge that saw the Labor Department's consumer price index register its biggest year-on-year jump in more than three decades last month has added pressure on the monetary institution.
Biden's Treasury Secretary Janet Yellen, who was also Fed Chair, has signaled her support for her former deputy to serve a second term.
"I've said that I think Chair Powell has done a very good job of running the Fed," she told CBS in a Sunday interview.
But she added, "What's important is that President Biden choose someone who's experienced and credible and there are a range of candidates."
Brainard is the only registered Democrat on the Fed board from which Biden must choose the next leader, and progressive Democrats believe she would be tougher on banking regulation.
Economist Joel Naroff said Brainard could indeed choose to slow some easing of regulations on big banks. But one of the Fed's two mandates is controling prices, and when it comes to that, it's unclear where her views differ from Powell's.
"The only alternative policy at this point is to start raise rates right away," Naroff said, which would likely decelerate demand and the economy overall.
"And what does that accomplish? I'm not sure."
- Temporary inflation -
Biden also must fill an opening on the board and the position of Vice Chair, since Richard Clarida's term in office expires on January 31, as well as that of first vice chair overseeing banking supervision, which Randal Quarles said he would resign at the end of December.
The new team will be at the forefront of Washington's fight against inflation.
Fed leaders have said the price increases will level off over time, and the bank won't raise its rates until it finishes tapering its monthly purchases of bonds and securities to help the economy recover from the downturn, likely in the middle of next year.
Both Powell and Brainard are inflation "doves," inclined to keep rates lower for longer, Bryson said. He predicts control of the central bank will likely come down to politics.
Powell, who took office in 2018 after then-president Donald Trump declined to give Yellen a second term as Fed chair, would likely attract both Democratic and Republican votes in the Senate confirmation process.
Brainard may also win approval in the Senate, which Biden's Democratic party narrowly controls, but Bryson said her path is more uncertain.
"Does President Biden want to risk a big confirmation fight with everything else he has on his plate? It's a political decision here and I'm not sure how its going to break," he said.