FILE PHOTO: The Federal Reserve headquarters in Washington on Sept. 16 2015. REUTERS/Kevin Lamarque//File Photo
February 15, 2022
By Pete Schroeder and Lindsay Dunsmuir
(Reuters) – A key U.S. Senate panel is set on Tuesday to vote on President Joe Biden’s slate of nominees to lead the Federal Reserve, including the renomination of Jerome Powell as chair and Sarah Bloom Raskin as the central bank’s Wall Street regulator.
Raskin, a former member of the Fed’s Board of Governors and a one-time U.S. Treasury official, has emerged as the most contentious candidate of the group, with some analysts expecting the 24-member panel to be evenly divided along party lines.
Republicans have attacked Raskin over her past comments on using financial rules to police climate change and have accused her of inappropriately lobbying on behalf a fintech firm on whose board she sat, accusations Raskin has denied.
While a tie vote would not end Raskin’s nomination, it would complicate and potentially delay her path to confirmation by the full Senate, where a simple majority is required for such votes. The committee vote is scheduled for 2:15 p.m. EST (1915 GMT).
With a tied banking panel, Raskin is more likely to need the support of all 50 Democratic senators, including moderates Joe Manchin and Kyrsten Sinema, who have opposed other aspects of Biden’s policy agenda. Democratic Senator Ben Ray Lujan is also recovering from a recent stroke, which may further slow the timeline in the event of a committee deadlock.
“Sarah Bloom Raskin’s nomination faces the stiffest headwinds of the five Fed nominees, and it will come down to a handful of centrist voters, but we view the odds of confirmation as modestly better than a coin flip right now,” said Isaac Boltansky, director of policy research for brokerage BTIG.
If confirmed, Raskin would become the most powerful banking regulator in Washington, overseeing an ambitious portfolio.
Her key projects will likely include building tools to assess financial risks from climate change, reversing Wall Street breaks granted by her predecessor Randal Quarles and drafting new rules for fair lending and fintechs.
Raskin, who held senior roles at the Treasury and Fed under President Barack Obama, has been praised by progressive Democrats for her experience and expertise. Moderate Democrats on the Senate Banking Committee also spoke supportively of Raskin at her confirmation hearing, and two of them – Mark Warner of Virginia and Jon Tester of Montana – told Reuters on Monday they both planned to vote for Raskin and the rest of Biden’s nominees.
OTHER NOMINEES
The committee will also be voting on four other nominees for Fed slots: Powell, current Fed Governor Lael Brainard, and proposed newcomers Lisa Cook and Philip Jefferson.
Powell, a Republican who was appointed during the Trump administration, is set to sail through for another four-year term as Fed chair amid broad bipartisan support. His first term as chair expired earlier this month, but he remains in charge of monetary policy pending his confirmation.
Brainard, Cook and Jefferson used their confirmation hearings to signal their backing of the monetary policy agenda set by Powell, which will see the Fed likely begin lifting interest rates at its March 15-16 policy meeting, with several hikes expected to follow in a bid to bring an inflation rate running at the highest level since the early 1980s back under control.
Brainard, a Democrat appointed by Obama as a Fed governor in 2014, also seems likely to be confirmed for promotion to the vice chair position, which would make her Powell’s deputy, despite Republican misgivings that she would push for the central bank to strengthen its climate change policies.
Cook is an economist at Michigan State University, while Jefferson is an economist and currently dean of faculty at Davidson College in North Carolina.
All Democrats on the committee are expected to vote in favor of Cook and Jefferson while at least one Republican, Senator John Kennedy, also indicated he would support them both.
If Cook and Jefferson, who are Black, are confirmed as governors to the currently all-white Fed Board, it would make it the most racially diverse in the central bank’s 108-year history.
(Reporting by Pete Schroeder and Lindsay Dunsmuir; Editing by Michelle Price, Dan Burns and Paul Simao)
Source: One America News Network
