Warren says she’ll oppose second term for Powell

Sen. Elizabeth Warren (D-Mass.) said Tuesday she will oppose Federal Reserve Chair Jerome Powell’s renomination over his financial regulatory record if President Biden chooses to reappoint him.

Warren told Powell, a Republican, during a Senate Banking Committee hearing on Tuesday that she has “grave concerns” about the Fed chief’s support for loosening financial rules, calling him a “dangerous man” to lead the central bank.

“Renominating you is gambling the next five years of a Republican majority on the Fed board and a Republican chair who has regularly voted to deregulate Wall Street won’t drive this economy off a financial cliff again,” Warren said, evoking the 2007-08 financial crisis.

“With so many qualified candidates for this job,” she continued, “this risk is not worth taking.”
While Warren had suggested for months she may vote against another term for Powell, her formal opposition is the most significant strike from progressives against the Fed chief’s potential reappointment. 

Powell’s term as Fed chair runs out in February and Biden is under immense pressure from progressive Democrats and activist groups to replace the Republican with a staunch liberal.

Former President Trump appointed Powell to chair the Fed board in 2017, replacing then-Fed Chair Janet Yellen with a Republican who shared her support for loose monetary policy but held laxer views on bank regulation. 

Democrats have praised Powell for boosting the Fed’s focus on maximizing employment, standing up to Trump’s constant attacks, and spearheading the bank’s successful efforts to stabilize markets amid the onset of the pandemic. But the party is divided over whether Powell’s employment-driven approach to monetary policy is worth the cost of future regulatory rollbacks.

Under Powell, the Fed reduced the frequency of certain aspects of bank stress tests, streamlined liquidity requirements and adjusted aspects of a rule banning banks from making certain risky trades with their own assets, all created through the 2010 Dodd-Frank Wall Street reform law.

While Warren and many fellow financial sector critics have ripped the Powell Fed for endangering the country, other Democrats — including former Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.) — say they’re not dangerous enough to warrant opposing Powell.

“I know that some argue that your deregulatory actions are mostly harmless. I disagree. I think they’ve put taxpayers at risk for hundreds of billions of dollars, but even at that, so far you’ve been lucky,” Warren said. 

“I came to Washington after the 2008 crash to make sure that nothing like that would ever happen again. Your record gives me grave concern,” she continued. “Over and over, you have acted to make our banking system less safe. And that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination.”

Warren’s opposition may encourage more progressive Democratic senators to follow suit if Biden decides to renominate Powell and could put more pressure on the president to change gears. Even so, Powell enjoys broad bipartisan support and would take less political capital for Biden to confirm than a liberal replacement, particularly in the evenly split Senate.

Updated at 12:27 p.m.

Tags Donald Trump Elizabeth Warren Fed Federal Reserve Janet Yellen Jerome Powell Joe Biden

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