Under Jerome Powell’s leadership, the US Federal Reserve has recently raised interest rates twice in the fight against high inflation. Progressive price increases will also be an important issue in his second term, for which the US Senate confirms the 69-year-old.
The head of the US Federal Reserve, Jerome Powell, has been confirmed by the Senate for a second term. The Chamber of Congress voted by a large majority of 80 to 19 to extend the mandate for another four years. US President Joe Biden nominated the 69-year-old for a second term in November, even though the Fed chief belongs to the opposition Republicans.
But Powell enjoys a cross-party reputation. There is also a tradition of US Federal Reserve governors getting two terms in office, even if there have been exceptions. Powell became head of the powerful central bank in 2018 under then-President Donald Trump.
In view of the high inflation in the USA, the Fed chairman is currently in the spotlight. Driven by the corona pandemic and the Ukraine war, inflation has risen to its highest level in around 40 years. The inflation rate has recently fallen slightly, from 8.5 percent in March to 8.3 percent in April.
Under Powell’s leadership, the Fed has hiked interest rates twice in recent months to fight high inflation: by 0.25 percentage points in March and then by 0.5 percentage points last week. The key interest rate is thus in a range between 0.75 and 1.0 percent.
After Powell’s Senate confirmation, Biden declared that the fight against inflation was his “top domestic priority”. He is therefore happy that the Senate has confirmed his nominations for the Fed: “The Federal Reserve has a leading role in the fight against inflation.”
At the end of April, the Senate had already confirmed Fed governor Lael Brainard, who many Democrats had wanted as the new head of the central bank, as the new deputy head of the Fed. This week, economics professor Lisa Cook became the first black woman in Fed history, and economics professor Philip Jefferson, also black, was confirmed on the Board of Governors.
On the other hand, Biden had to withdraw the nomination of another candidate for the seven-member Fed executive committee, Sarah Bloom Raskin, in the face of resistance from the Republicans, but also from some Democrats. Michael Barr is to take her place on the Board of Governors, where he will be responsible for overseeing the country’s banks. Biden called on the Senate to confirm Barr’s nomination quickly.
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