WASHINGTON – The Senate on Thursday confirmed Jerome Powell for a second four-year term as chairman of the Federal Reserve, giving bipartisan support to Powell’s high-stakes efforts to curb the highest inflation in four decades.
The 80 to 19 vote reflects widespread support in Congress for the Fed’s drive to fight rising prices through a series of sharp interest rate hikes that could continue next year. The Fed’s goal is to slow down borrowing and spending enough to ease inflationary pressures.
Powell has been in charge of the central bank since February, when his first term expired.
He faces the difficult and risky task of trying to quell inflation without weakening the economy so much as to cause a recession. The labor market remains stable and has strengthened to a point that Powell says is “too hot” and contributes to overheating.
Rising prices across the economy have hurt millions of Americans whose wages do not meet the costs of needs such as food, gas and rent. And the prospect of consistently higher interest rates has worried financial markets, with stock prices falling for weeks.
Powell’s support in the Senate on Thursday was roughly in line with what he received four years ago after he was first nominated for president by President Donald Trump. At that time, the Senate voted 84-13 to approve it.
Powell’s confirmation comes, although many economists have sharply criticized the Fed for waiting too long to respond to rising inflation, making its task more difficult and risky.
In the past, members of Congress have often objected to higher interest rates for fear that they would lead to job losses. The chronically high inflation of the 1970s was due in part to political pressure that led the Fed to abandon a sharp rise in interest rates under Presidents Lyndon Johnson and Richard Nixon.
Powell himself was sharply criticized by Trump when the Fed raised interest rates in 2017 and 2018, after the unemployment rate reached the lowest level in half a century of 3.5%. Powell canceled some of those increases in 2019 after the economy slowed after Trump’s tariffs on Chinese imports.
This week, Biden said that while he respected the Fed’s independence, he backed his efforts to raise interest rates on loans that have already led to soaring mortgages, car loans and business loans.
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The Senate confirms Powell for a second term as the Fed fights inflation
Source link The Senate confirms Powell for a second term as the Fed fights inflation