A group of progressive lawmakers led by Congresswoman Alexandria Ocasio-Cortez is calling on President Biden to replace Federal Reserve Chairman Jerome Powell, whose term expires early next year. Lawmakers said Powell, who has held the position of head of the Central Bank since 2018, has not done enough to address the risks of climate change in the financial system and has weakened regulations.
“At a time when the Intergovernmental Panel on Climate Change is warning of possible catastrophic and irreversible damage caused by climate change, we need a leader at the forefront who will take bold and decisive action to eliminate climate risk,” he wrote. group of lawmakers, which includes representatives Ayanna Pressley of Massachusetts, Rashida Tlaib of Michigan, Jesus Garcia of Illinois and Mondaire Jones of New York.
At the same time, the group accused Powell of weakening the reforms “substantially” made in the wake of the Great Recession to regulate the big banks.
“During the 2008 financial crisis, millions of Americans lost their homes and jobs and many have failed to fully recover,” the statement said. “The weakening of financial regulations that were created specifically to prevent this disaster from happening again carries a risk of subsistence for Americans across the country.”
This is not the first time Powell has been criticized for the regulations. Senate Banking Committee Chair Sherrod Brown has publicly said he believes Powell has done a good job overall as president, though he has been concerned about regulations and has criticized Powell for not doing enough to keep Wall Street under control.
At a July hearing, Brown told Powell, “During your tenure, the Fed has withdrawn significant guarantees, making it easier for larger banks to raise the price of their shares and increase their already enormous power in our economy.” Senator Elizabeth Warren has also said they are concerned about steps to weaken regulations. Powell argues that these efforts have been made in his custody.
Powell has said that climate change poses “profound challenges” to the global economy and that the Central Bank can play a role in risk analysis, but that climate change is not something it can directly consider in the time to establish monetary policy, stating that the Central Bank does not. they exist to do climate policy.
However, earlier this year, the Federal Reserve announced the creation of two committees that identify and address climate-related risks to financial stability. But Republican lawmakers stepped back immediately and warned the Central Bank not to exceed its dual mandate of price stability and maximum employment.
The White House has not said whether President Biden will re-appoint Powell, only that he is committing to his senior economic team and that the decision will be made in due course. According to an official, the president will appoint who he believes will be most effective in implementing monetary policy.
Powell, a Republican, was first appointed to the Governing Board by President Obama in 2012. He was then appointed to head the Central Bank by President Trump in 2017, replacing then-Federal Reserve Chair Janet Yellen. , after a term.
When asked if Powell was doing a good job in a July interview, Yellen praised the Central Bank.
“I have a lot of respect for the Federal Reserve and it’s important that they make independent judgments about what’s appropriate. I think, you know, the Fed has done a good job,” Yellen told CNBC.
On whether he would recommend him for a second term, Yellen declined to comment, saying only that it was a conversation he would hold with the president.