AOC-led progressives are calling for Biden to replace the Fed Powell presidency

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“We urge President Biden to reimagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice,” lawmakers said in a statement Tuesday morning.

In addition to Ocasio-Cortez, the statement was issued by representatives of Rashida Tlaib of Michigan, Ayanna Pressley of Massachusetts, Mondaire Jones of New York and Chuy Garcia of Illinois, all members of the Progressive Congress.

Powell, a Republican and former investment banker, was appointed to lead the powerful Federal Reserve by former President Donald Trump in 2017, who then harshly criticized his hand-picked president. Powell’s term expires in February and the White House has not said whether he will be reappointed.

Under Powell, the Fed wasted little time responding forcefully to the economic consequences of the pandemic in March 2020. Economists have credited the Fed’s historic actions in helping prevent a financial crisis and a full-blown depression in the United States.

Congress has the Fed’s job of maximizing the number of U.S. jobs while keeping inflation low. While the Democrats in the statement credited the Powell-led Fed for making changes to the way it faces its full-employment target, they expressed concern about its track record of the climate crisis and regulation.

“Under its leadership, the Federal Reserve has taken very few steps to mitigate the risk that climate change poses to our financial system,” lawmakers said in the statement.

However, the Fed joined an international network of global financial regulators focused on climate change in late 2020. In June, Powell warned that the climate crisis poses “profound challenges for the global economy and certainly , for the financial system “.

The AOC-led statement also criticized the Fed for “weakening” financial regulations enacted after the Great Recession, including capital and liquidity requirements, stress testing, and the Volcker Rule. Powell has previously disputed the argument that the Fed has weakened regulations.

The presidency of the Fed is appointed by the president. The term lasts four years. In search of continuity, former Democratic presidents Bill Clinton and Barack Obama reappointed Fed presidents who were appointed by previous presidents, both Republicans. But Trump did not re-appoint Fed Chair Janet Yellen, who was appointed by Obama.

A White House official told CNN on Tuesday that when appointing Fed officials, Biden “will nominate candidates who he says will be the most effective in implementing monetary policy.”

The Federal Reserve declined to comment.

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