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US Senate confirms Jerome Powell for 2nd term as chief of US Federal Reserve

The 80-19 vote reflected broad support in Congress for the Fed's drive to combat surging prices through a series of sharp interest rate hikes that could extend well into next year

FPJ Web Desk | Updated on: Friday, May 13, 2022, 10:59 AM IST

US Federal Reserve Chairman Jerome Powell | AFP
US Federal Reserve Chairman Jerome Powell | AFP
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The US Senate on Thursday voted to confirm Jerome Powell as chairman of the Federal Reserve, making official his position as head of the country's central bank for another four-year term.

The 80-19 vote reflected broad support in Congress for the Fed's drive to combat surging prices through a series of sharp interest rate hikes that could extend well into next year. The Fed's goal is to slow borrowing and spending enough to ease the inflation pressures.

Powell, a Republican who enjoys broad bipartisan support, has continued at the helm of the central bank although his first term officially expired February 4.

His confirmation was delayed by a drawn-out process 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 comes 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 said repeatedly that tackling the issue is primarily a job for the Fed.

"I put forward highly qualified nominees to lead that institution, and I strongly urge the Senate to confirm them without delay," he said Tuesday.

Powell led the central bank as is 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, and is now overseeing efforts to cool price pressures impacting American families.

Spiking prices across the economy have caused pain for millions of Americans whose wages aren’t keeping up with the cost of such necessities as food, gas and rent. And the prospect of steadily higher interest rates has unsettled the financial markets, with stock prices having tumbled for weeks.

Biden in a statement issued following Powell's confirmation said that he is pleased by the Senate's actions and that it will help move forward the administration's agenda to fight inflation.

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.

Cook and Jefferson 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.

Cook, a professor of economics and international relations at Michigan State University, has focused her research on how discrimination has harmed the American economy and the damage downturns do to the poor.

Jefferson, also an economics professor, is only the fourth Black man to serve as a Fed governor.

(with inputs from agencies)

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Published on: Friday, May 13, 2022, 10:59 AM IST