Nominee for Fed chair vows continuity
‘Aim is to sustain a strong jobs market,’ Powell plans to tell Senate committee during confirmation hearing
Jerome Powell, nominated by President Donald Trump to lead the Federal Reserve, plans to tell a Senate committee Tuesday that he supports the Fed’s efforts to maintain economic growth and to tighten regulation of the financial system, according to a copy of his prepared testimony.
Powell, who has played a role in the enforcement of those policies as a Fed governor since 2012, added that he saw room for improvement, including opportunities to reduce financial regulation.
“If confirmed, I would strive, along with my colleagues, to support the economy’s continued progress toward full recovery,” Powell said in the prepared testimony, released by the Fed on Monday evening before his confirmation hearing before the Senate Banking Committee on Tuesday. “Our aim is to sustain a strong jobs market with inflation moving gradually up toward our target.”
The mention of the job market is a significant marker of Powell’s views. Some conservatives say the Fed should focus solely on inflation and not worry about unemployment.
Powell also reiterated his support for the Fed’s efforts to increase the strength of financial regulation in the aftermath of the 2008 financial crisis, creating some distance from the Trump administration, which has described those regulations as an ineffective impediment to growth.
“Our financial system is
without doubt far stronger and more resilient than it was a decade ago,” he said. “Our banks have much higher levels of capital and liquid assets, are more aware of the risks they run, and are better able to manage those risks.”
Powell’s characterization of the financial industry differs sharply from the picture painted last week by Trump, who criticized the regulatory actions of the Consumer Federal Protection Bureau in a Twitter post, saying that “Financial Institutions have been devastated and unable to properly serve the public.”
Powell added, however, that he was open to changes that improved the current system.
“We will continue to consider appropriate ways to ease regulatory burdens while preserving core reforms — strong levels of capital and liquidity, stress testing and resolution planning — so that banks can provide the credit to families and businesses necessary to sustain a prosperous economy,” he said.
Powell, 64, joined the Fed in 2012. He is a lawyer by training and an investment banker by trade, with deep roots in the financial industry and the Republican Party. Since joining the Fed, he has voted consistently in support of the policies proposed by the current chairwoman, Janet Yellen, and her predecessor, Ben Bernanke. But Powell has sometimes expressed reservations about the extent of the Fed’s efforts to revive economic growth and to restrain the financial industry, suggesting he would seek to moderate the central bank’s current approach.
Trump nominated Powell this month, declining to appoint Yellen to a second term. Trump said he wanted to choose his own Fed chairman. Yellen has said she will step down as soon as her successor officially takes the post.
In his testimony, Powell praised Yellen and Bernanke and added that he would resist political pressure.
“I am committed to making decisions objectively and based on the best available evidence,” he said. “In doing so, I would be guided solely by our mandate from the Congress and the longrun interests of the American public.”