WASHINGTON – Progressive lawmakers are ramping up opposition to a second term for Federal Reserve Chair Jerome Powell because of bank deregulatory measures taken under his leadership. But many observers question whether those protests will be enough to stop his reappointment.
During the Trump administration, Powell and other Federal Reserve Board governors backed rules that provided midsize banks with substantial relief from the Dodd-Frank Act and eased other capital requirements, among other things. They advanced those measures often over the dissents of Lael Brainard, the board’s lone Democrat.
Liberals in Congress such as Sen. Elizabeth Warren, D-Mass., And Rep. Alexandria Ocasio-Cortez, DN.Y., say such steps weakening the post-financial crisis regulatory regime should be a concern as the Biden administration considers re-nominating Powell when his term ends in February.
But others who criticized Trump-era deregulation are undecided on how to view Powell’s record. They say his monetary policies have benefited low-income workers and efforts to contain economic damage from the pandemic should win him points.
“Powell has created an economy in which jobs can be created,” said one progressive, who has criticized the Fed’s recent regulatory relief measures and asked not to be named. “Even though he used monetary policy and not financial regulation to get there, Powell’s results speak for themselves. ” Powell’s record of corralling votes on the interest-rate setting Federal Open Market Committee “is something no other candidate has and warrants his reappointment,” the person said.
Fed Chairman Jerome Powell has defended his regulatory record. “We raised capital standards on the largest banks,” he said during a July Senate Banking Committee hearing. “Full stop.”
Some analysts believe that if Powell is replaced, it will not be because of Powell’s record but more that President Biden opted for a more progressive choice.