Jerome Powell confirmed that he is the President of the US Central Bank

Jerome Powell during a press conference in Washington, May 4, 2022 (Jim WATSON/AFP)

US Central Bank President Jerome Powell kicked off a second term on Thursday: The Senate voted for Joe Biden at a time when the institution is battling inflation with the aim of not affecting economic growth.

The Senate plenary passed, as expected, in favor of “Jay” Powell, with a vote of 80 to 19.

This 69-year-old lawyer and former banker, who headed the Federal Reserve (Fed) for four more years, will have to slow inflation, whose institution expected neither activism nor perseverance. But it will have to play hard, so as not to slow down the economy or overburden employment.

“The Federal Reserve plays a key role in fighting inflation,” Joe Biden commented in a press release.

So far, Jerome Powell has been reassuring that the monetary institution has the “tools” to make it happen.

But he warned on Thursday that controlling inflation “will not come without pain,” although “the most painful thing will be…if inflation remains entrenched in the economy at high levels,” he said. National Public Radio’s daily public radio business program.

Some senators also considered it against him because he did not see such a dizzying and permanent rise in prices coming. Like Republican Richard Shelby, who voted against his reappointment because for him, Mr. Powell and the rest of the Federal Reserve have let the American people down.

Democrat Bob Menendez also voted against a second term, but for other reasons: “Under President Powell’s leadership, the Federal Reserve continues to miss critical opportunities to appoint Latinos to the highest levels of its leadership.”

climate risks

Governor of the Federal Reserve since 2012, Jerome Powell was appointed chairman of the institution in 2018 by Donald Trump, who later caused his outrage.

He succeeded Janet Yellen, who has since become Joe Biden’s Treasury Secretary.

Jerome Powell and Lyle Brainard surround Joe Biden at the White House, during their nomination on November 22, 2021
Jerome Powell and Lyle Brainard surround Joe Biden at the White House, during their nomination on November 22, 2021 (JIM WATSON / AFP)

This Republican, considered consensual, had assured during his appointment in November that the Fed would act so that inflation did not “take root”. But the price curve has continued upward since then.

Another priority is to combat the “evolving risks associated with climate change”. Left-wing Democrats called Joe Biden to pick someone else, and judge his actions in terms of taking climate change into account.

Since arriving in the White House in January 2021, the president has managed to reshuffle the Federal Reserve’s Monetary Committee, with five positions held.

Lyle Brainard, who was the only Democratic governor, became vice president after being confirmed on April 26 (52 votes to 43).

diversification of rulers

The US president also wanted to diversify the powerful establishment, by bringing in two black economists as conservatives.

Thus Lisa Cook became the first black woman to hold this position, despite opposition from Republicans. Equality of votes in the Senate between the two camps would have required the Vice President of the United States, Kamala Harris, to vote for a narrow majority (51-50).

The appointment of Philip Jefferson was confirmed Wednesday (91-7).

Joe Biden welcomed the arrival of “these highly qualified members of the Board of Governors” to the Federal Reserve.

Lisa Cook during the Senate hearing on February 2, 2022
Lisa Cook during the Senate hearing on February 2, 2022 (Ken CEDENO/POOL/AFP/Archives)

The Senate must now decide whether to appoint Michael Barr to the position of vice president for banking regulation, after Sarah Blum Raskin, who was initially selected, gave in due to a lack of sufficient support. It should be heard May 19 by the Senate Banking Committee.

The Fed, since March, has raised its key rates twice, to fight inflation at its highest levels in 40 years, and has warned that several more increases are expected by the end of the year.

Economically, the appointment of the head of the Central Bank is one of the most important decisions in the term of the President of the United States.

The Federal Reserve, the most powerful central bank in the world, decides the monetary policy of the country. Monitors and regulates the financial sector. Its decisions can either boost or slow down US economic activity by setting the cost of credit, affecting the dollar and thus all financial markets.

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