US Senate confirms Jerome Powell as Fed chair

Washington

THE US Senate on Tuesday confirmed Federal Reserve Governor Jerome Powell as the next head of the central bank, succeeding Janet Yellen, a move likely to provide continuity in US monetary policy with the economy growing now for nine years straight.

The Republican-controlled Senate voted 84-13 to approve the 64-year-old lawyer to a four-year term as Fed chair beginning early next month.

It was the most lopsided of recent Fed chair votes, signalling both Mr Powell's bipartisan appeal and the ebbing of some of the tensions raised by the central bank's aggressive response to the 2007-2009 financial crisis and recession.

Controversy over those Fed policies led to a narrower 56-26 vote margin when Ms Yellen became chair in 2013, and a 70-30 vote when former chair Ben Bernanke was named to a second term. Mr Powell will be "central to ensuring a safe and sound financial system while supporting a vibrant, growing economy," banking committee chairman and Idaho Republican Mike Crapo said on the Senate floor. "He will play a key role in rightsizing federal regulations and alleviating unnecessary burdens."

Mr Powell takes over as chair with US monetary policy on a steady course toward gradually higher interest rates and a smaller balance sheet.

However, a debate is brewing within the central bank about whether it needs to rethink its approach to inflation and whether the recent massive tax overhaul legislation will affect the US economy.

Mr Powell must also decide how far to accommodate a push by the Trump administration to roll back some post-crisis financial regulations.

The potential for financial deregulation advocated by the Trump administration prompted the most pointed opposition to Mr Powell, a former executive at the Carlyle Group private equity firm whose credentials as Fed chair are rooted in his understanding of markets. Mr Powell is not an economist by training.

"We need a Fed chair who can stand up to Wall Street," said Senator Elizabeth Warren, a Democrat. "That person is not Governor Powell." The 12 votes against Mr Powell included both Democrats and some conservative Republicans.

Mr Powell, 64, was nominated by President Donald Trump in November as a largely uncontroversial pick whose monetary policy views are closely aligned with Ms Yellen's.

During a Senate hearing on his nomination in November, Mr Powell said he would "respond decisively", if necessary, to future problems. REUTERS