Senate panel confirms Powell and Brainard as top Fed positions | National policy
WASHINGTON (AP) — The Senate Banking Committee approved the nomination of Jerome Powell for a second four-year term as chairman of the Federal Reserve on Wednesday, just hours after the The Fed has begun what will be a difficult effort to fight inflation.
Fed Governor Lael Brainard was also approved to serve as Fed Vice Chairman, and the committee endorsed Philip Jefferson, an economist and dean of Davidson College in North Carolina. All three will now be considered by the full Senate. Michigan State economist Lisa Cook also qualified for the full Senate on a tie vote on the committee.
If all nominees win Senate confirmation, the Fed will have six of its seven governorships filled as it tackles the nation’s worst bout of inflation since the early 1980s. Fed policymaking implemented its first interest rate hike since 2018 and said more rate hikes this year “would be appropriate.”
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One spot remains vacant due to GOP opposition to President Joe Biden’s nomination of Sarah Bloom Raskin to the Fed’s top financial regulatory position. Republicans on the committee, led by Pennsylvania Sen. Pat Toomey, opposed Raskin’s pledge to include climate change concerns in Fed regulatory policies. Toomey argued that Raskin would use Fed rules to discourage bank lending to oil and gas companies.
Raskin withdrew his nomination on Tuesday after West Virginia Democratic Senator Joe Manchin said he would vote against her in the Senate. With the Senate split 50-50 and all Republicans opposed, Manchin’s opposition left Raskin without a path to confirmation.
Biden is expected to nominate another candidate to fill the vacant Fed board position.
Powell was approved by a 23-1 vote, with only Senator Elizabeth Warren, Democrat of Massachusetts, voting no. Warren objected to Powell’s support for measures she said weakened Fed oversight of big banks, and previously called Powell a ‘dangerous man’ run the Fed.
Sen. Sherrod Brown, an Ohio Democrat who chairs the committee, said Powell “has been a dependable voice and a steady hand throughout this crisis. He’s earned the opportunity to lead the Fed as President”.
Brainard, a Democrat who served as a top Treasury official in the Obama administration, was endorsed by a 16-8 vote. Jefferson was endorsed unanimously. All Republicans voted against Cook, leading to a 12-12 vote. Cook has drawn opposition from some conservative economistswho said his research on the impact of lynchings and racial violence on African-American innovation was irrelevant to the Fed’s mission.
A tie vote on the committee allows the entire Senate to consider a nomination.
If approved, Cook would be the first black woman on the Fed’s board in the Fed’s 109-year history and Jefferson would be the fourth black man.
Cook has been a professor of economics and international relations at Michigan State since 2005. She also served as an economist on the White House Council of Economic Advisers from 2011 to 2012 and served as an advisor to the transition team of Biden on Fed and bank regulatory policy.
Cook also championed black women in economics, a profession significantly less diverse than other social sciences. In 2019, she co-wrote a column in The New York Times which argued that “economics is neither a welcoming nor supportive profession for women” and “is especially hostile to black women”.
To combat these issues, Cook spent time mentoring young black women in economics, running a summer program run by the American Economic Association, and winning a mentorship award in 2019.
Jefferson, who grew up in a working-class family in Washington, DC, according to an interview with the American Economic Association, focused his research on poverty and monetary policy. In a 2005 paper, he concluded that the benefits of a vibrant economy through reduced unemployment among low-skilled workers outweighed the costs, including the risk that businesses would adopt automation once the labor was scarce.
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