Jerome Powell confirmed as next Federal Reserve chair

The Senate has confirmed Jay Powell as the next Federal Reserve chair.Powell, 64, has been a Fed governor for ...

Posted: Jan 24, 2018 9:37 AM
Updated: Jan 24, 2018 9:37 AM

The Senate has confirmed Jay Powell as the next Federal Reserve chair.

Powell, 64, has been a Fed governor for five years and helped shape policy under Janet Yellen, who will leave after a single term as the first woman to lead the world's most influential central bank. Powell has said his leadership would represent continuity with his predecessors.

Since Powell was nominated by President Trump in November, progressive Democrats like Senator Elizabeth Warren of Massachusetts have raised concerns about whether he would be too aggressive in dialing back post-financial crisis reforms.

"I'm deeply concerned that as soon as Governor Powell unpacks his boxes in the Chairman's office, he will begin weakening the new rules Congress and the Fed put in place after the 2008 financial crisis," Warren said according to prepared remarks. "We need someone who believes in tougher rules for banks - not weaker ones. That person is not Governor Powell."

Despite those objections, Powell easily won confirmation on Tuesday by a vote of 84-13 with strong bipartisan support. Nearly 40 Democrats -- with Charles Schumer, Sherrod Brown and Ron Wyden among them -- crossed the aisle to support him.

Shortly after the final tally was called, Democratic Sen. Dianne Feinstein reversed course, choosing to oppose Powell's nomination. She was joined by eight other Democrats and four Republicans including Sen. Marco Rubio, Ted Cruz, Mike Lee and Rand Paul, who objected to his nomination.

Related: Next up: Big fight over Dodd-Frank rollback

Powell has said he would consider "appropriate ways" to ease rules on banks while preserving core pieces of the 2010 Dodd-Frank regulatory law, including annual stress tests for banks and strong capital requirements.

He has lauded the central bank's patient approach, led by Yellen, in gradually raising interest rates and slowly unwinding the $4.5 trillion balance sheet that the Fed amassed to support the economy after the crash.

"I think now the economy is strong, unemployment is low, growth is strong -- in fact, it appears to have picked up -- so it is time for us to be normalizing interest rates and the size of the balance sheet," Powell told lawmakers during his confirmation hearing in November.

Yellen's term expires February 3. Powell, a consistent ally of her policies, faces the delicate task of keeping the economy running as he begins his four-year term.

Related: Federal Reserve, buoyed by stronger economy, lift rates

Two immediate challenges facing him are how quickly to raise interest rates and how to continue the safe unwinding of the balance sheet.

In December, policy makers voted to raise the federal funds rate, which helps determine rates for mortgages, credit cards and other borrowing, to a range of 1.25% to 1.5%.

Central bankers also penciled in plans to raise rates three more times in 2018, and then twice in 2019.

Financial markets do not expect Powell to deviate significantly from the Fed's current policy path.

In deciding to raise rates slowly over the past year or so, the Fed has weighed competing forces. Stubbornly low inflation and consumer prices have suggested the Fed should hold off on raising rates. But steady economic growth and low unemployment suggested it should act.

Related: IMF: Trump tax cuts will boost global economy

Yellen has described inflation as something of a "mystery" but has signaled she expects it will stabilize over time.

Another potential wrinkle: The $1.5 trillion tax cut signed by Trump late last year. Its effect could be immediate on the economy, helping encourage businesses to invest and buy more equipment, while putting more money in Americans' wallets.

But the tax cut could also force the Fed to raise rates faster if it stimulates the economy further.

Powell spent much of his career in investment banking and private equity before joining the Fed.

A Princeton graduate, he was a lawyer in New York before he joined the investment bank Dillon, Read & Co. in 1984. He stayed there until he joined the Treasury Department in 1990, during the George H.W. Bush administration.

After he left Treasury, he became a partner in 1997 at The Carlyle Group, the private equity and asset management giant. He left Carlyle in 2005.

It's not the first time a former investment banker has taken the helm at the Fed, but Powell would be the first chairman in more than 40 years who is not a formal economist.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 37624

Reported Deaths: 1503
CountyConfirmedDeaths
Hennepin12150785
Ramsey4805226
Stearns234519
Dakota228690
Anoka2180107
Nobles16626
Olmsted110115
Washington106940
Mower9452
Rice8357
Scott7004
Clay58538
Kandiyohi5701
Wright4565
Blue Earth4532
Todd4002
Carver3641
Lyon3092
Sherburne3075
Freeborn2900
Steele2281
Watonwan2160
Benton2143
St. Louis17715
Martin1635
Nicollet15912
Cottonwood1340
Goodhue1298
Winona12215
Crow Wing10612
Pine1030
Le Sueur981
Chisago971
Otter Tail931
McLeod880
Carlton850
Dodge840
Polk812
Chippewa781
Unassigned7637
Isanti720
Itasca6412
Waseca640
Douglas620
Meeker611
Morrison591
Murray580
Becker550
Faribault550
Jackson550
Sibley542
Pennington500
Pipestone371
Mille Lacs342
Renville322
Wabasha310
Brown302
Rock300
Yellow Medicine300
Beltrami290
Fillmore280
Houston250
Swift211
Norman200
Wilkin203
Redwood180
Cass152
Wadena150
Aitkin140
Big Stone140
Kanabec141
Koochiching141
Roseau130
Marshall120
Grant100
Lincoln100
Pope100
Mahnomen81
Clearwater70
Hubbard60
Lake60
Traverse50
Lac qui Parle40
Stevens40
Red Lake30
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 30377

Reported Deaths: 720
CountyConfirmedDeaths
Polk6332179
Woodbury320644
Black Hawk219658
Buena Vista170711
Linn124282
Johnson12388
Dallas123529
Marshall104119
Story7513
Pottawattamie71911
Scott71910
Wapello70530
Crawford6752
Muscatine62444
Dubuque62122
Sioux4600
Tama46029
Wright3771
Louisa36013
Jasper32117
Plymouth3135
Warren2641
Dickinson2602
Washington2349
Hamilton1871
Webster1712
Cerro Gordo1471
Boone1451
Clarke1292
Clay1280
Allamakee1264
Mahaska11517
Shelby1140
Clinton1051
Poweshiek1048
Carroll931
Pocahontas931
Bremer916
Des Moines862
Henry863
Franklin840
Cedar811
Emmet800
Taylor790
Cherokee751
Monona740
Floyd702
Marion680
Hardin670
Guthrie644
Sac630
Benton621
Jefferson590
Osceola590
Jones560
Harrison530
Humboldt531
Lee532
Butler522
Iowa510
Buchanan501
Monroe506
Hancock490
Calhoun482
Delaware481
Madison422
Lyon410
Clayton403
Davis391
Fayette370
Mitchell370
Winneshiek370
Mills360
Palo Alto360
Grundy350
Kossuth330
Lucas304
Greene290
Howard290
Chickasaw280
Jackson270
Union270
Winnebago270
Ida230
Cass210
Appanoose203
Keokuk201
Page200
Van Buren190
Worth170
Audubon161
Adair150
Ringgold150
Decatur110
Montgomery102
Wayne100
Adams80
Fremont70
Unassigned70
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