2 Dem senators oppose Powell as Fed chairman

Incumbent’s stance on climate change draws opposition from Biden’s party

WASHINGTON — Two Democratic senators said Friday that they oppose the nomination of Jerome Powell to a second term as chair of the Federal Reserve, saying Powell has been insufficiently committed to fighting climate change, an issue that the world’s central banks are increasingly confronting.

Their opposition comes as President Joe Biden is expected to announce within days whom he will choose for the nation’s most powerful economic position. Many Fed watchers expect Powell to be offered a second term, though Lael Brainard, a member of the Fed’s Board of Governors, has emerged as the leading alternative.

“President Biden must appoint a Fed Chair who ... shares the Administration’s view that fighting climate change is the responsibility of every policymaker,” Sens. Sheldon Whitehouse from Rhode Island and Jeff Merkley from Oregon said in a statement. “That person is not Jerome Powell.”

Including Whitehouse and Merkley, three Democratic senators have publicly said they will vote against Powell, a former private equity executive who was elevated to the Fed chairmanship by President Donald Trump and whose term expires in early February. The other is Sen. Elizabeth Warren of Massachusetts, who has called Powell “a dangerous man” to lead the Fed because of his support for loosening some bank regulations.

Powell has broad support among Senate Republicans, however, and if nominated would likely receive bipartisan backing. He was approved as Fed chair in early 2018 by an 84-13 vote, with 39 Democrats voting in favor, including Whitehouse. Merkley voted no, as did Vice President Kamala Harris, then a senator from California.

Brainard is seen as slightly more dovish than Powell, meaning she generally supports keeping interest rates low to support more hiring. With inflation running at three-decade highs, her nomination would likely rely more on Democratic support.

On Tuesday, Biden said he would announce a decision within several days.

Environmentalists warn that extreme weather, worsened by global warming, will increasingly create major losses for banks and insurance companies. Bank loans to commercial and residential properties near the coasts are at risk from rising ocean levels and other climate impacts, potentially threatening banks’ financial health, the groups say.

And lending to oil and gas companies carries additional risk as the world transitions to clean energy, environmentalists add. That suggests that banks should be more cautious before making loans to drilling and other companies in the energy sector.

Such concerns have raised objections from conservatives, however, that the Fed could respond by taking steps to discourage bank loans to such companies. Powell said at a press conference earlier this month that “we do think we have a role in climate change.”