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From Banking and Finance Law Daily, November 3, 2017

Members of Congress react to Powell nomination for Fed Chair

By Colleen M. Svelnis, J.D.

President Donald J. Trump has officially announced the nomination of Jerome H. Powell to become the next Chairman of the Federal Reserve Board. Powell has been member of the Federal Reserve’s Board of Governors since May 2012. The White House releasecites Powell’s “steady leadership, sound judgment, and policy expertise” during his tenure on the board. Powell also served as Under Secretary at the Department of Treasury in President George H.W. Bush’s administration. He received his undergraduate degree from Princeton University and his law degree from Georgetown University.

Powell released a statement indicating that he “will do everything within my power to achieve the goals assigned to the Federal Reserve by the Congress: stable prices and maximum employment.” His appointment would be for a term of four years beginning Feb. 3, 2018. The nomination breaks recent precedent where the previous three Fed chairmen were reappointed—in each case by a president of the opposite political party (see Banking and Finance Law Daily, Nov. 2, 2017).

Legislative response. Senate Majority Leader Mitch McConnell (R-Ky) stated that he was “encouraged” by Powell’s nomination and hopes it will lead to a “more transparent and accountable Fed.” Senator Chuck Schumer (D-NY) praised current Fed Chair Janet L. Yellen for steering the economy “with precision, transparency, and remarkable intellect,” and stated that it is “hard to understand why the administration would elect to make her the first fed chair in decades to not be re-nominated for a second term.” Schumer stated that he hopes Powell will continue to prioritize job growth, safety and soundness while “keeping unemployment low, and fostering an economy that leads to higher middle-class Americans wages.”

House Minority leader Nancy Pelosi (D-Calif) released a statement that the Democrats “are hopeful that Powell will uphold and strengthen the Dodd-Frank Act’s historic consumer protections that safeguard the American people against reckless and abusive practices by unscrupulous players on Wall Street.” Representative Maxine Waters (D-Calif), Ranking Member of the Committee on Financial Services, issued a statement about Yellen’s leadership of the Fed, lauding her “masterful job” as steward of the U.S. economy. Waters expressed disappointment that “[d]espite her impeccable credentials, accomplishments and outstanding service,” she was not reappointed for another term.

Many Senate Banking Committee members reacted by releasing statements. Ranking Member Sherrod Brown (D-Ohio) expresseddisappointment that Yellen was not re-nominated after contributing to one of the longest economic expansions in U.S. history. Brown stated that he looks forward to hearing more from Powell. Senator David Perdue (R-Ga) wants to hear Powell’s views and solutions on “the complex process of unwinding a $4.5 trillion balance sheet” as well as regulations dealing with credit and capital formation put in place by the Dodd-Frank Act and federal agencies. Senator Catherine Cortez Masto (D-Nev) also commented on the nomination.

Senator Jack Reed (D-RI) stated that Powell has a great deal of experience. But that he plans to ask Powell about his ideas “to help strengthen and safeguard our economy and his commitment to the Fed’s dual mandate of stable prices and maximizing employment.”

Representative Roger Williams (R-Texas), House Committee on Financial Services member, commended the decision to nominate Powell. Representative Andy Barr (R-Ky) stated that he looks forward to working with Powell to “institute a more transparent, and strategy-based monetary policy so that households and businesses can make investment and financial decisions with greater confidence and certainty.” Barr also hopes that Powell will look to reform and streamline “overly-burdensome financial regulations.” Finally, Rep. Blaine Luetkemeyer (R-Mo) issued a statement congratulating Powell and expressed confidence that he will “carve his own path as chairman and shape policies that will benefit our economy.”

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