– The Senate has confirmed Jerome Powell to serve another four-year term as the leader of the Federal Reserve.
– As chairman of the Federal Open Market Committee, the Feds monetary policymaking body, he is tasked with getting record inflation under control.
– The Senates approval of Mr. Powell comes amidst the highest inflation the U.S. has suffered in four decades.
– Former President Barack Obama made Jerome Powell a governor of the Federal Reserve, then former President Donald Trump nominated him as its chairman.
– At that time, Mr. Powell was approved by the Senate in an 84-13 vote.
– The Senates approval of Chair Powell to serve another term means that President Biden has appointed four of the seven governors of the Federal Reserve.
– Facing inflation rates higher than 8%, the most severe since the 1980s, the Federal Reserve has increased interest rates in two consecutive FOMC meetings, the first time it has done so since 2006.
– Last week, it hiked rates by 50-basis points (0.5%), the steepest hike in the federal funds rate since 2000.
– Powell said that the Committee planned to increase rates by a half percentage point at each of the next two FOMC meetings, though the situation remains dynamic and subject to adaptation.
– He does not expect the Fed to increase rates faster than 0.5% at a time, though.
– While Mr. Powell has emphasized the Feds view that the economy remains strong, he has warned that it would be difficult to bring down inflation without causing a recession.
– Despite Powells recent hawkishness, many of the Senates dissenting votes stemmed from dissatisfaction with the high inflation.