Powell Secures Senate Renomination Vote to Lead Federal Reserve for Second Term
2022.05.12 22:31
By Yasin Ebrahim
Investing.com – Federal Reserve Chairman Jerome Powell was confirmed Thursday to a second term by the Senate at a time when many are keeping a close eye on whether the central bank will be able to rein in inflation without tipping the economy into recession.
The Senate voted 80-19 in favor of Powell’s nomination in a rare showing of the bipartisanship on Capitol Hill as the hottest pace of inflation for 40 years has transcended political boundaries.
Powell’s renomination was widely expected after President Biden said last year that he would back the reappointment.
Under Powell’s stewardship, the Fed was quick to pump liquidity into the economy by cutting rates, and resuming quantitative easing to cushion the economy from the pandemic impact.
But many argue that the central bank has been too slow to unwind its emergency stimulus measures that have played a role in boosting inflation to four-decade highs. The Fed is now having to play catch up on monetary policy tightening that some fear could slow the economy by too much into a recession.
The Fed hiked rates by 50 basis points in May and signaled that it would begin reducing its balance sheet in June. Powell also hinted that further 50-basis points could be appropriate at upcoming meetings.
