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US Senate confirms Powell for second term as central bank chief

·3-min read
The confirmation of Jerome Powell (pictured May 4, 2022) as US Federal Reserve chair for a second tirm comes amid surging inflation (AFP/Jim WATSON) (Jim WATSON)

The US Senate on Thursday confirmed Jerome Powell to a second term as head of the Federal Reserve, as the central bank fights to crush soaring inflation.

The 80-19 vote came amid inflation that has hit a 40-year high, fueled by the conflict in Ukraine and ensuing sanctions imposed on Russia, as well as Covid-19 restrictions in China that have raised concerns the global supply snarls may worsen.

Powell had continued at the helm of the central bank although his first four-year term officially expired February 4.

His confirmation was delayed by the battle to approve Lisa Cook to join the Fed board -- the first Black woman to serve in the post -- who was finally confirmed on Tuesday with only Democratic votes.

The vote on Powell came the day after the upper house of Congress approved the nomination of Philip Jefferson of Davidson College, marking the first time the Fed board has had more than one Black governor.

US President Joe Biden, whose popularity has taken a hit from the soaring inflation and record gasoline prices, has repeatedly said that tackling the issue is primarily a job for the Fed.

"I am pleased to see the Senate take a step forward on my agenda to get inflation under control by confirming my nominees to the Fed," he said in a statement after the vote.

Powell, a Republican, enjoyed broad bipartisan support -- but also bipartisan opposition. Six Democrats voted against him, including progressive senators Bernie Sanders and Elizabeth Warren, who established the Consumer Financial Protection Bureau.

"Working families should not bear the cost of fighting inflation," Warren tweeted after the vote. "As Fed Chair, Jerome Powell must focus on strengthening our economy without slamming the brakes on its growth or hurting families already struggling with higher prices."

- Bringing down inflation -

Powell, who first joined the Fed board in 2012, led the central bank as it slashed the benchmark interest rate to zero at the start of the pandemic in March 2020 and pumped money into the financial system to prevent a severe downturn in the world's largest economy.

Now he is overseeing efforts to cool price pressures impacting American families.

The Fed last week announced its largest rate hike since 2000 and signaled similar increases were likely in the coming months.

The challenge for Powell and the Fed is to turn down the heat on inflation without tipping the United States into recession, but he has expressed confidence that the economy is strong enough to withstand the tighter monetary policy.

With the latest additions, the Fed board will be just one short of its full complement of seven governors.

The Senate last month confirmed longtime Fed governor Lael Brainard as vice chair of the board.

In his statement, Biden urged the Senate to confirm his final nominee, Michael Barr, as vice chair for supervision.

The US president's first pick for the role of top Fed banking cop, Sarah Bloom Raskin, withdrew her name from consideration in March when it became clear she would not have sufficient support.

She had previously won bipartisan approval for senior roles at the Fed and Treasury, but faced opposition from Republicans and from a key Democratic lawmaker over her stance on climate change issues in banking supervision.

The Republican opposition in the Senate boycotted a committee vote on her nomination and the four other top Fed positions, which she cited as the main factor in her decision to drop out.

Jefferson and Cook, a professor of economics and international relations at Michigan State University, each have researched inequality in the labor market.

Powell has repeatedly stressed the importance of ensuring economic opportunities extend to disadvantaged groups -- a notable change of focus in an economy where Black workers face far higher unemployment rates than other racial groups.

Jefferson is only the fourth Black man to serve as a Fed governor.

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