News ID: 321581
Published: 0341 GMT May 13, 2022

Powell wins second term as US Fed chief as inflation battle rages

Powell wins second term as US Fed chief as inflation battle rages

The US Senate on Thursday confirmed Jerome Powell to a second term as head of the Federal Reserve, as the central bank ramps up its fight to crush soaring inflation.

The vote came amid inflation that has hit a 40-year high, fueled by the conflict in Ukraine and sanctions imposed on Russia, as well as COVID-19 restrictions in China that have raised concerns that the global supply snarls may worsen, AFP reported.

The Fed chair has said his primary focus is on getting inflation under control, but acknowledged the effort could be painful.

US President Joe Biden, whose popularity has taken a hit from the soaring inflation and record gasoline prices, has repeatedly said that tackling the issue is primarily a job for the Fed.

“I am pleased to see the Senate take a step forward on my agenda to get inflation under control by confirming my nominees to the Fed,” he said in a statement after the vote.

Powell, who first joined the Fed board in 2012, led the central bank as it slashed the benchmark interest rate to zero at the start of the pandemic in March 2020 and pumped money into the financial system to prevent a severe downturn in the world's largest economy.

Now, he is overseeing efforts to cool price pressures affecting American families.

The Fed last week announced its largest rate hike since 2000 and signaled similar increases were likely in the coming months.

The challenge for Powell and the Fed is to turn down the heat on inflation without tipping the US into recession.

While he has expressed confidence the economy is strong enough to withstand the tighter monetary policy, Powell said it will be challenging amid the unprecedented global shocks and “may actually depend on factors that we don’t control.”

In an interview with Marketplace on Thursday, he renewed his warning that “the process of getting inflation down to two percent will also include some pain.”

“The most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels.”

Powell, a Republican, enjoyed broad bipartisan support in the 80-19 vote – but also bipartisan opposition. Six Democrats voted against him, including progressive senators Bernie Sanders and Elizabeth Warren, who established the Consumer Financial Protection Bureau.

“Working families should not bear the cost of fighting inflation,” Warren tweeted after the vote. “As Fed Chair, Jerome Powell must focus on strengthening our economy without slamming the brakes on its growth or hurting families already struggling with higher prices.”

Powell had continued at the helm of the central bank even after his first four-year term officially expired on February 4.

Powell has repeatedly stressed the importance of ensuring that economic opportunities extend to disadvantaged groups – a notable change of focus in an economy where black workers face far higher unemployment rates than other racial groups.

 

 

 

   
KeyWords
 
Comments
Comment
Name:
Email:
Comment:
Security Key:
Captcha refresh
Page Generated in 0/2383 sec