FILE PHOTO: Federal Reserve Chairman Jerome Powell takes his seat to testify before a Senate Banking, Housing and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress” on Capitol Hill in Washington, U.S., July 15, 2021. REUTERS/Kevin Lamarque/File Photo
September 28, 2021
By Jonnelle Marte
(Reuters) – U.S. Federal Reserve Chair Jerome Powell faced heated questions on Tuesday from senators criticizing the central bank’s trading guidelines, financial regulation and diversity efforts.
Speaking to members of the U.S. Senate Banking Committee a day after two regional Fed presidents being scrutinized for their investment trades announced their retirements, Powell defended the central bank and vowed to improve policies where needed.
“This is a blow to the image of the central bank,” Senator Raphael Warnock, a Democrat from Georgia, said about the trading controversy. He asked Powell about what steps he is taking to protect the “impartiality” of the Fed.
This followed some criticisms shared at the start of the hearing, when Democratic Senator Sherrod Brown, the head of the U.S. Senate Banking Committee, said he plans to introduce legislation that would ban Fed officials from owning individual stocks.
Powell, who earlier this month ordered a review of the Fed’s ethics rules, added that the central bank is also examining the trades done by regional Fed presidents to make sure they were legal and in compliance with current ethics guidelines.
“Even if it appears to be the case that these trades were in compliance with existing rules, that just tells you the problem is the rules and the practices and the disclosure needs to be improved,” Powell said in response to a question. “We will rise to this moment and address this.”
The Fed chief, whose term expires in February, also fielded harsh words from Democratic Senator Elizabeth Warren of Massachusetts, who called him a “dangerous man” to head the Fed and said she would vote against his reappointment.
“Renominating you means gambling that … a Republican chair who has regularly voted to deregulate Wall Street won’t drive this economy over a financial cliff again,” said Warren, a long-time critic of the Fed’s oversight of Wall Street. “I just don’t think that’s a risk worth taking.”
The White House has not yet announced a decision on whether to reappoint Powell or choose an alternative.
(Reporting by Jonnelle Marte; Editing by Andrea Ricci)
Source: One America News Network
