Senate OKS Powell for second term as Fed fights inflation
Jerome Powell, the Federal Reserve chair, was confirmed to a second four-year term at the head of the central bank Thursday — keeping him in one of the most consequential jobs in the United States and world economy at a moment of rapid inflation and deep uncertainty.
Powell, who was first chosen as a Fed governor by President Barack Obama and then elevated to chair by President Donald Trump, was renominated by
President Joe Biden late last year.
The Senate approved Powell by a 80-19 vote. Several Republicans and Democrats voted against the nomination. Sen. Richard Shelby, R-ala., cited high inflation in opposing Powell, posting on Twitter that “we should not reward failure.” Sen. Bob Menendez, D-N.J., cited the central bank’s failure to promote Latino leaders.
Biden has now appointed four of the Fed’s seven governors in Washington, putting his imprimatur on the central bank at a critical moment as it faces what is arguably one of its toughest challenges in decades: tackling stubbornly high inflation.
Consumer prices climbed 8.3 percent in April from the prior year, lingering near the fastest pace of inflation in four decades. The Fed is in charge of fostering full employment and maintaining stable prices, so the task of wrestling those price increases back under control will fall largely to Powell and his colleagues. “Inflation is much too high, and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” Powell said last week.
Powell’s reappointment comes after an eventful first term, one in which he found himself at odds with the man who elevated him to chair and dealing with an economy that was essentially shut down overnight because of the pandemic.
Now, Powell will be leading a Fed that is fighting meaningful price increases for the first time in decades — and one that is undergoing a significant leadership shake-up. The Senate last month confirmed Lael Brainard, formerly a Fed governor, as Biden’s choice for the Fed’s vice chair, an influential position within the central bank.
This week, the Senate confirmed two other new Fed governors — Lisa Cook and Philip Jefferson. Biden has also nominated Michael Barr as the new vice chair for supervision, and his confirmation hearing before the Senate Banking Committee is scheduled for next week.