White House still silent on potential Powell reappointment
Support for possible re-enrollment of Jerome Powell as the chairman of federal Reserve The move is growing among prominent Senate Republicans who have indicated they could help him secure a second term to lead the central bank, despite sharp criticism from progressive lawmakers.
NS white House Still considering whether to tap Powell to lead the Fed for the next four years – one of the most consequential economic decisions for President Biden – before his term officially ended in February 2022. Press Secretary Jen Psaki has said Biden will make a decision with enough time to ensure the Senate can confirm the person.
Powell, a lawyer by training and a former Republican Treasury official, is generally respected on Wall Street and well-liked among lawmakers on both sides. The Fed chair – one of the most powerful players in Washington with the ability to determine the pace of economic growth – is usually nominated for a second term, often to reinforce central bank independence from politics.
“Most of the people on the Republican side I’ve spoken to support his nomination,” Sen. John Kennedy, R-La., told reporters. “I can’t think of a person who would oppose that.”
Yellen endorses Powell for a second term, increasing his reappointment odds
Kennedy, who sits on the pivotal Senate Banking Committee, is among a group of at least eight Republican lawmakers who have indicated they will vote to confirm Powell if Biden nominates him for another term. This includes Sans Thom Tillis of North Carolina, Steve Dines of Montana, Jerry Moran of Kansas, Mike Rounds of South Dakota, Chuck Grassley of Iowa and Kevin Kramer of North Dakota.
His endorsement could mean that Powell would be able to confirm 50-50 in the Senate, even though Biden is Facing pressure from progressive parliamentarians Appointment of former President Trump, to replace Fed Chair.
Sen. Elizabeth Warren last month became the highest-profile lawmaker opposing Powell’s reappointment, arguing that during her tenure, the central bank had “weakened” banks, including major reforms, overhauling the Volcker Rule of the Dodd-Frank Act. for a lot of action”. Bank stress testing and allowing lenders to promote investment in venture capital.
“Your record gives me serious concern,” Warren told Powell during a Senate Banking Committee hearing. “Over and over again you have worked to make our banking system less secure. And that makes you a dangerous person to lead the Fed.”
At the same time, Powell reportedly garnered a significant amount of support from Janet Yellen, now Treasury Secretary, which gave him nearly two decades of experience at the Fed, including four years leading the central bank. Yellen has also worked directly with Powell, who served as governor at the Fed during his tenure. (In 2018, Powell replaced Yellen at the helm of the Fed, making her the first chair not to be reappointed after serving a full-term).
The White House decision comes as Fed policymakers decide how and when to begin unwinding some of the ultra-easing monetary policies put in place to support the US economy during the pandemic. Most Fed officials agreed last month that they could begin to slow down their aggressive bond-buying program in mid-November, the first step they would take to withdraw support. American economy.
Minutes of the September 21-22 meeting of the US central bank suggest policymakers are set to gradually begin dialing back $120 billion in monthly bond purchases, a policy known as “quantitative easing”. The credit is designed to be kept cheap, as soon as the next month .
“Participants generally assessed that, provided that economic recovery remains broadly on track, a gradual tapering process that ends in the middle of the following year would likely be appropriate,” Minute, released last week, said. “Participants noted that if a decision is made to initiate taping purchases at the next meeting, the process of taping could begin as early as mid-November or mid-December with a monthly purchase calendar.”
Policymakers said they expect to end the taping process by July next year, about a month or two earlier than previously expected.
Economists widely expect Fed officials to announce tapering plans during their November 2-3 meeting.