On Thursday, the Senate approved Jerome Powell for a second four-year term as Federal Reserve chairperson. The position will provide Powell bipartisan support for his high-stakes attempts to contain the worst inflation in four decades.
Following President Joe Biden’s re-nomination last year, Fed Chair Powell was approved by the Senate an 80-19 to serve a second term as the nation’s central banker. Mr Powell’s confirmation by the Senate came when the United States was experiencing its greatest inflation in four decades.
Many of the Senate’s opposing votes stemmed from unhappiness with rising inflation, notwithstanding Powell’s recent hawkishness. Senator Richard Shelby, for example, has stated that in view of the record-breaking inflation, Mr Powell should not be rewarded.
The Fed’s effort to counteract rising prices through a series of steep interest rate rises, which might last well into next year, received widespread congressional approval with an 80-19 vote. The Fed’s mission is to reduce inflationary pressures through slowing borrowing and spending.
Powell has been temporarily managing the central bank since his first tenure expired in February. He confronts a tough challenge in reducing inflation without causing the economy to deteriorate to the point of recession. According to Powell, the employment market remains strong and has strengthened to an “unsustainably hot” level, leading to an overheated economy.
Rising costs across the economy hurt millions of Americans because their incomes aren’t keeping up with the cost of basics like food, petrol, and rent. The idea of progressively rising interest rates has also unnerved financial markets, with stock prices falling for weeks.
The leadership of the Federal Reserve system’s regional reserve banks is in upheaval. The Boston Fed and the Dallas Fed will each have new leadership this summer, while the Kansas City Fed and the Chicago Fed are both set to retire soon.
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