The two main sponsors of the 2010 financial-regulatory legislation that bears their names said Monday that President Biden should reappoint Fed Chairman Jerome Powell to a second term atop the central bank.

The endorsement of Mr. Powell by former Sen. Chris Dodd (D., Conn.) and former Rep. Barney Frank (D., Mass.) is notable because the Fed chairman has encountered stiff resistance from some liberal Democrats who are disappointed at measures to ease financial regulations under Mr. Powell. They have cited that record in urging Mr. Biden to pick someone else to lead the Fed when Mr. Powell’s term expires in February.

In an opinion article published on the website of the The Hill newspaper, Messrs. Dodd and Frank said reappointing Mr. Powell would do more to advance Mr. Biden’s economic agenda because of his support for an overall monetary policy that has emphasized healing the labor market after the coronavirus pandemic.

“Dumping Powell and putting any kind of traditional liberal in there, who I would ordinarily prefer, in this climate complicates the political problem on the best issue we have,” Mr. Frank said in an interview with The Wall Street Journal Monday.

Mr. Frank said Mr. Powell, a Republican appointed to the Fed chair post by former President Donald Trump, has helped to avoid further polarizing a debate over how to best manage economic growth at a time when inflation has soared but unemployment remains elevated.

Former Rep. Barney Frank (D., Mass) and former Sen. Chris Dodd (D., Conn.) favor a second term for Fed Chairman Jerome Powell, an issue that has divided Democrats.

Photo: Chip Somodevilla/Getty Images

Mr. Powell argued when the coronavirus pandemic hit last year that the U.S. should aggressively deploy fiscal policy to limit scarring from long spells of unemployment or business failures. He repeated that message as recently as February, when he warned that the costs of doing too little were greater than the hazards of doing too much.

“I want a debate about how the government should best respond to economic problems, not whether it should even try. If it’s not Powell, we’re back in the latter,” Mr. Frank said. “Getting support for Biden’s economic program is the single most important thing right now, and Powell’s denial that inflation is either imminent or inevitable given the program is a very big deal.”

Five House Democrats last month, including Massachusetts Rep. Ayanna Pressley and New York Rep. Alexandria Ocasio-Cortez, called on Mr. Biden to “reimagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice” by appointing a new Fed chair. They said Mr. Powell had done too little to address climate change and they criticized the steps the Fed has taken to relax certain financial rules.

Mr. Frank disputed criticism lodged against Mr. Powell, including by Massachusetts Sen. Elizabeth Warren, a Democrat who has sharply chided Mr. Powell’s regulatory record. “The changes he was making on financial regulation were pretty marginal,” said Mr. Frank. “The easing up was not major.”

The retired Massachusetts lawmaker, who chaired the House Financial Services Committee from 2007 until 2011 and served for 32 years in Congress, said Mr. Biden could still strongly influence financial policy with appointments at other regulators, including the Fed’s vice chairman for bank supervision. The four-year term of the current vice chairman, Randal Quarles, expires next month.

Mr. Frank said he thought Mr. Powell’s credibility on economic issues was an “invaluable asset” when compared with the marginal benefit from having a somewhat more liberal regulator at the top of the Fed. “We’re not giving merit badges to Boy Scouts.” he said. “We’re trying to run a country.”

Fed governor Lael Brainard, who is widely considered the frontrunner to succeed Mr. Powell if he isn’t reappointed, would be “marginally better on regulation, maybe, but the impact that Powell has politically [on economic policy] is enormously greater than Brainard,” said Mr. Frank. “If Brainard was the chair, you would make it easier for Republicans to attack. Powell gives more cover to the moderate Democrats and intellectual reassurance.”

Mr. Powell has also drawn criticism from environmental groups who want Mr. Biden to use Fed appointments to push the central bank to play a bigger role fighting climate change. Mr. Frank said that agenda could be advanced through other forums, including the Financial Stability Oversight Council, a group of financial regulators led by the Treasury secretary and created by the Dodd-Frank Act.