US President Joe Biden’s nominees for the Federal Reserve Board have completed the first formal step in the ratification process by hearing nominations before the Senate Banking Committee.
Here are the next steps, according to Reuters, as the Fed prepares to fight high inflation.
Jerome Powell has been the interim president of the Fed since Saturday
Jerome Powell’s four-year term as Fed chairman ends today. On Friday, the Fed’s board appointed him interim chairman, with effect from Saturday, so he can continue to work as the Senate considers his re-election.
The last time a Fed’s term of office ended before the Senate approved the new term was in 1996. The Fed’s board had voted to appoint Alan Greenspan as interim chairman on Friday, March 1 of that year, the last working day before from the end of his term. The Senate later confirmed his third term as Fed chairman on June 20, 1996.
Powell remains in charge of monetary policy. He was re-elected chairman of the Federal Open Market Committee (FOMC) in January, the Fed said on Friday.
The vote in the Senate Banking Committee on February 15
Former Fed Chairman Sarah Bloom Raskin, Michigan State University Lisa Cook and Davidson College Philip Jefferson held hearings on Thursday to confirm their tenure. Hearings on Powell’s re-election and Lael Brainard promotion to Fed vice president took place in January.
Democratic Sen. Sherrod Brown, chair of the committee, set Feb. 15 for the ballot for all five candidates. It should be noted that the members of the committee are equally divided between Democrats and Republicans.
During the hearings, at least one Republican, and in some cases more than one, said they supported the candidacies of Powell, Brainard, Jefferson and Cook, indicating that the four could “positively” address the ratification process in Senate plenary.
The prospects for the candidacy of Raskin, Biden’s nominee for Fed’s top banking watchdog, were less clear. “She tried to convince Republicans she would not be tough, but I do not think she was very successful,” said Derek Tang, an economist at LH Meyer / Monetary Policy Analytics.
Brown has said he has spoken to Senate Majority Leader Chuck Schumer about speeding up Fed appointments to the Senate.
With the Senate evenly divided between Democrats and Republicans, Fed nominations could depend on the vote of Sen. Joe Manchin, a moderate Democrat from West Virginia. Asked earlier this week for his views, Manchin said the candidates were “extremely fit”, but the rest of his response indicated he was referring to potential candidates for the US Supreme Court, not the Fed.
Manchin has said he is concerned about inflation. Cook, Jefferson and Raskin have stated that they view the fight against inflation as a top priority for the Fed. Manchin also opposes aggressive climate action, something Republicans say would mean Raskin’s confirmation.
Meanwhile, voting can also be affected by turnout.
Former President Donald Trump’s attempt to confirm his former financial adviser and controversial Fed nominee Judy Shelton in 2020 failed in part because some Republicans were quarantined for the coronavirus and could not go to the Senate to vote.
Senator Ben Ray Luján, a Democrat from New Mexico, suffered a stroke last week and his absence has already forced the postponement of several nominations. His recovery will reportedly take four to six weeks, postponing the most likely vote to ratify the Fed candidates until March.
What about Powell’s deposition in Congress?
The Fed chief usually reports to Congress on monetary policy in February and November each year. But even if this deposit is delayed at this critical juncture in US monetary policy, the interim Fed chairman has plenty of other places to send his message.
Source: Capital

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