Biden’s next major appointment will be the chair of the powerful Federal Reserve. The incumbent chair, Jay Powell, whose term expires in January, has made a big push to get reappointed.

Powell, an orthodox Republican, was appointed to the Fed by Obama in 2012 and elevated to chair by Trump in late 2017. But he has been a major ally of Biden’s program of economic expansion, favoring very low interest rates and full employment. He has also urged Congress to spend a lot of money so that the entire burden of promoting recovery doesn’t fall on monetary policy and the Fed.

Powell has done Biden another big favor by shooting down worries about inflation, which in turn has reassured financial markets. (If the Federal Reserve, the temple of price stability, is not fretting about inflation, why should anyone else worry?)

So what’s not to like?

What’s not to like is Powell’s record on regulation, which is dreadful. And don’t forget—the Fed has two big jobs. One is monetary policy, the other is financial regulation.

Under the Fed’s vice chair for supervision, Randy Quarles, whom Powell usually votes with, the Fed has been very lax on everything from approving big bank mergers to giving financial predators slaps on the wrist. Quarles’s own term as vice chair ends in September, and it is crucial that Biden name a tough regulator to fill that slot, as well as a Fed chair committed to good regulation as well as good monetary policy.

Powell has given Biden’s expansive program a lot of cover with financial markets and Republicans, as well as practical help in the form of low interest rates. But any successor named by Biden would be equally good on monetary policy, and a lot better on regulation.

The intellectual counterrevolution on the question of interest rates, inflation, and employment is all but won. There is little support for the old conventional wisdom that we need tight money and high unemployment to ward off inflation, especially in times like these.

But the counterrevolution on regulation has barely begun. And recent history shows that the combination of loose money and lax regulation is a recipe for financial bubbles followed by crashes.

Jay Powell has been a pleasant surprise. Biden can do a lot better.