Fed 'Powell 2nd Term' Launch Faces Turmoil Amid US Republican Opposition

Former Treasury Secretary Nominee Raeskin
Republican Members All Abstain from Confirmation Vote

Sarah Bloom Raskin, Former U.S. Deputy Secretary of the Treasury
[Photo by Reuters]

[Asia Economy Reporter Cho Hyun-ui] Amid the uncertain economic situation caused by COVID-19 and rising prices, the launch of the so-called 'Powell 2nd term,' in which Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), is reappointed, has been delayed due to disagreements between the ruling and opposition parties.

On the 15th (local time), the U.S. Senate Banking Committee announced that the confirmation vote for five Fed board members nominated by President Joe Biden was postponed due to a full boycott by the Republican Party.

The vote on that day targeted five individuals: current Chairman Powell, Vice Chair nominee Lael Brainard, Vice Chair for Supervision nominee Sarah Bloom Raskin, former Deputy Treasury Secretary, Raskin who was also nominated as a Fed board member, as well as Lisa Cook, a professor at Michigan State University, and Philip Jefferson, a professor at Davidson College.

The Republican boycott was due to the nomination of former Deputy Secretary Raskin. The reason was that Raskin allegedly did not adequately respond to questions regarding her work while employed at the fintech company Reserve Trust.

At that time, the company had obtained access to the Fed's payment system, raising suspicions that Raskin might have exerted influence behind the scenes using her connections.

The Republicans also criticized Raskin for advocating in 2020 that fossil fuel companies should not be allowed to use loan programs designed to overcome COVID-19.

Republican Senator Pat Toomey emphasized in a statement ahead of the vote, "The Banking Committee should not proceed with a vote on Raskin until fundamental questions are sufficiently resolved."

Meanwhile, the Democratic Party supported the nominations of the five Fed board members. Democratic Banking Committee Chair Sherrod Brown said, "The Republicans have made a decision that could delay the Fed's ability to respond to economic challenges such as inflation," adding, "The Republicans have betrayed the American people." Regarding the allegations raised by the Republicans, he defended Raskin, stating, "Raskin has answered all questions and has been the target of relentless attacks."

With 100 seats in the Senate split evenly between Democrats and Republicans at 50 seats each, and including the Vice President as the ex officio Senate Chair with a casting vote, the Democrats hold a slim majority. However, since one Democratic senator is currently on medical leave, the confirmation cannot pass without Republican consent.

Meanwhile, the Senate narrowly confirmed Robert Califf, former FDA Commissioner, as the new head of the U.S. Food and Drug Administration (FDA). Some senators initially raised concerns about Califf's ties to the pharmaceutical industry and his views on birth control. However, he received 50 votes in favor and 46 against in the Senate vote that day.

This content was produced with the assistance of AI translation services.