Senate Confirms Jerome Powell to Second Term as Fed Chair

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– 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.

 

 

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