Senator Brown Sees Powell Renomination as Fed Chief as a ‘Maybe’
Senator Brown Sees Biden Unveiling ‘Slate’ of Fed Nominations
(Bloomberg) -- Senate Banking Committee Chair Sherrod Brown said that he expects President Joe Biden will release a combination of nominations to the board of the Federal Reserve at the time he unveils his decision on the central bank chair, which may or may not be Jerome Powell.
“I think the president -- I don’t speak for him of course -- but is probably waiting, and going to put a whole slate forward” of up to four Fed board picks, Brown, an Ohio Democrat, said in an interview Tuesday on Bloomberg Television’s “Balance of Power With David Westin.” He said he has talked with the president about the matter, though couldn’t predict what Biden will do.
Brown declined to specify whether he wants Fed Chair Powell nominated for a second term, saying it’s Biden’s decision to make. He reiterated that he thought Powell has done a “reasonably good job” on monetary policy but has “fallen short” on regulating Wall Street and on climate change.
“When the president looks for making up to four nominations -- maybe including Powell, maybe not -- there will be a much greater emphasis on workers,” Brown predicted. “President Biden, and I talked to him just the other day, understands you want to put workers at the center of our economic policy. And that includes making the Fed look like America but think like America too.”
‘Get Along’
“We get along well,” Brown said of Powell, noting that the Fed chief is aware of his criticisms on the regulatory and climate change fronts.
Brown said aside from the chair, the vacant slot of vice chair for supervision is “really, really, really important” and he has advocated a couple of people to Biden, declining to specify their names.
The Senate Banking chief has stood apart from progressive Senator Elizabeth Warren of Massachusetts, who late last month said she wouldn’t back Powell for a second term, saying his regulatory record made him a “dangerous” candidate.
Republican Rips Powell
Separately Tuesday, Republican Senator Rick Scott of Florida became the first Republican to announce he will oppose a Powell renomination without a major change in policy -- blaming Powell’s Fed in part for inflation and for ignoring Scott’s advice on winding down its massive bond-buying programs.
“Without a significant and demonstrable change in course, I will not be able to support your continued service as chair of the Board of Governors of the Federal Reserve System beyond your current term ending February 2022,” Scott said in a letter to Powell. “American families cannot continue down this dangerous path of rising inflation, broken supply chains, and continued workforce challenges.”
Scott, who has been Powell’s staunchest public critic among Republicans, chairs the party’s Senate campaign committee and has helped make inflation a top issue for the GOP in their efforts to retake that chamber.
A majority of Republicans on the Senate Banking Committee, however, have said they would vote to confirm Powell if he is renominated -- essentially ensuring an easy bipartisan path to confirmation. Any other pick would potentially need to rely solely on Democratic votes.
Trading scandal
Asked about the recent revelations that some top Fed officials engaged in financial trading last year as the central bank was deploying policy measures to protect the economy from Covid-19, Brown said “I assume probably we will” hold hearings on the matter.
The Fed last week announced sweeping new restrictions on buying individual stocks and bonds as well as limit active trading after an embarrassing scandal that led two officials to resign and clouded Powell’s path to renomination.
Dallas Fed President Robert Kaplan and Boston’s Eric Rosengren both stepped down following revelations of unusual trading during 2020. Rosengren cited a chronic illness in announcing his early retirement.
“I don’t know that we’ve gotten to the bottom of it -- I assume we haven’t,” the Senate Banking chief said.
Asked whether what happened should reflect on Powell or on Governor Lael Brainard, who oversees a Fed panel responsible for the district banks, Brown said, “There has not been the attention paid by the chair of the Federal Reserve -- the one ultimately responsible -- nor has there frankly been attention paid by others that might or might not be responsible. I just don’t know that yet.”
Brown noted that Kaplan and Rosengren “may not have broken” any rule or law. He touted his past backing for legislation barring public officials including members of Congress and the president from trading corporate stocks, and said they along with Fed governors and district bank presidents ought not to be allowed such activity.
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