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Senate Banking Advances Powell Nomination for Fed Chairman

Sen. Elizabeth Warren only senator to vote against recommendation

Jerome Powell earned the support of all but one member of the Senate Banking Committee to advance his nomination for Fed chairman. (Photo By Tom Williams/CQ Roll Call)
Jerome Powell earned the support of all but one member of the Senate Banking Committee to advance his nomination for Fed chairman. (Photo By Tom Williams/CQ Roll Call)

The Senate Banking Committee voted 22-1 Tuesday to recommend confirmation of Jerome Powell as the next chairman of the Federal Reserve. Massachusetts Sen. Elizabeth Warren voted against the recommendation.

Powell received the support of Chairman Michael D. Crapo, who had voted against him during his renomination to the Fed board in 2014.

“His judgment and expertise will be a continued asset to the board,” the Idaho Republican said.

Ten of the 11 Democrats backed Powell. Minority-party members, including Warren, unanimously supported his reappointment to the Fed board in 2014.

“I’m very concerned that the Fed will systematically roll back” financial regulations, Warren said. In his confirmation hearing last week and in public comments, Powell has said he believes current financial rules “are too demanding” and should be relaxed, she said.

Powell’s confirmation sped through the committee and could quickly go to the Senate floor for a vote. Federal Reserve Board Chair Janet Yellen has said she will resign from the board once a new chairman is sworn in.

At his confirmation hearing last week, Powell described goals similar to Yellen’s: “Our aim is to sustain a strong jobs market with inflation moving gradually up toward our target. We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink.”

He said he is “strongly” committed to transparency and accountability, such as holding news conferences by the chairman after Federal Open Market Committee meetings, instituted by former Fed Chairman Ben Bernanke and continued by Yellen.

Powell also seemed to win favor from Crapo by agreeing that the senator’s bank deregulation bill would both provide regulatory relief for small banks while still maintaining regulatory powers over larger banks.

Watch David Hawkings’ Whiteboard: What Is the Debt Ceiling?

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After the vote on Powell, the Banking Committee turned to a markup of that bill, which has support from nine Democratic co-sponsors, but has drawn criticism as a rollback of the 2010 Dodd-Frank financial overhaul from ranking member Sherrod Brown of Ohio.

Remaking the Fed

President Donald Trump has the opportunity over the next year to remake the Fed, whose policies he criticized during the 2016 presidential campaign as holding back growth. Yellen’s departure would create a fourth vacancy on the seven-member board. With Powell as chairman, the only other current members would be Lael Brainard and Randal Quarles, a Trump nominee who joined the board in October.

Trump nominated Carnegie Mellon University professor Marvin Goodfriend to the board last week. He has three more vacancies to fill, including Yellen’s.

Powell received a 74-21 confirmation vote in 2012, with 20 Republicans and Vermont independent Sen. Bernie Sanders opposed. Every Democrat backed him, including Senate Banking members Brown, Jon Tester of Montana, Jack Reed of Rhode Island and Mark Warner of Virginia.

Powell’s confirmation tally in 2014 dropped to 67-24. Of the Republicans, 17 backed and 23 opposed his confirmation.

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