The Senate on Thursday confirmed Jerome Powell for a second four-year term as Federal Reserve Chair, giving bipartisan support to Powell’s efforts to curb the highest inflation in four decades.
The 80-19 vote reflected broad support in Congress for the Fed’s efforts to combat rising prices through a series of sharp rate hikes that could stretch well into next year. The Fed’s goal is to slow borrowing and spending enough to ease inflationary pressures.
Powell had temporarily headed the Fed since February, when his first term ended.
He faces a difficult and risky task trying to quell inflation without weakening the economy enough to cause a recession. The job market remains resilient and has strengthened to a point that Powell says is “too hot” and contributing to an overheated economy.
Soaring prices across the economy have hurt millions of Americans whose wages cannot keep up with the cost of basic necessities like food, gas and rent. And the prospect of steadily rising interest rates is unsettling the financial markets, and share prices have been falling for weeks.
Powell’s support Thursday in the Senate was about the same as he received four years ago after he was first named chairman by President Donald Trump. At the time, the Senate voted 84-13 to confirm it.
Powell’s confirmation comes even as many economists have sharply criticized the Fed for waiting too long to respond to worsening inflation, making its task more difficult and risky.
In the past, congressmen have often opposed higher interest rates, fearing they would lead to job losses. The chronically high inflation of the 1970s has been attributed in part to political pressures that caused the Fed to refrain from raising interest rates sharply under Presidents Lyndon Johnson and Richard Nixon.
Powell himself came under fire from Trump when the Fed hiked interest rates in 2017 and 2018 after the unemployment rate hit a half-century low of 3.5%. Powell reversed some of those hikes in 2019 after the economy slowed following Trump’s tariffs on Chinese imports.
This week, Biden said that while he respects the Fed’s independence, he supports its efforts to raise lending rates, which have already pushed up the cost of mortgages, auto loans and corporate borrowing.
https://www.independent.co.uk/news/world/americas/us-politics/jerome-powell-federal-reserve-chair-b2077906.html Senate confirms Powell for second term as Fed fights inflation