The White House on Tuesday said President Joe Biden has confidence in Federal Reserve Chair Jerome Powell, hours after Sen. Elizabeth Warren (D-Mass.) said the central bank chief had “failed as a leader” amid fallout from financial trades made by top Fed officials last year.
“He does have confidence in Powell at this time,” White House spokesperson Karine Jean-Pierre told reporters aboard Air Force One.
Powell, a Republican, is awaiting word on whether he will be reappointed to a second term, a decision that’s expected sometime this fall. He first joined the Fed’s board in 2012 as an appointee of former President Barack Obama and then was promoted to chair by former President Donald Trump in 2018.
The question of whether he deserves to keep his job has split lawmakers and liberal advocates. So far, Warren is one of only a few Democratic members of Congress to publicly oppose Powell, while others in her party have endorsed him.
The central bank has been rocked in recent weeks by revelations that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren actively traded in stocks and real estate assets while the central bank was engaged in a massive rescue of financial markets. Both Kaplan and Rosengren announced their resignations last week.
More recently, scrutiny has turned to Fed Vice Chair Richard Clarida, who moved between $1 million and $5 million out of a bond fund into stock funds in February 2020, just a day before Powell put out a statement signaling that the central bank might take action to cushion the economy at the onset of the pandemic. The Fed has said those transactions were pre-planned, before any emergency policy deliberations.
Powell has vowed to tighten ethics restrictions at the central bank.
On Monday, Warren called on the Securities and Exchange Commission to look into trading activities at the Fed, and on Tuesday, she took to the Senate floor to criticize Powell.
“Our nation does not need a go-along-to-get-along leader who doesn’t know or doesn’t care when, on his watch, people with great responsibility advance their own interests over those of our nation, or someone who drags his feet in dealing with problems that shake the public’s confidence in the institution he leads,” the Massachusetts Democrat said.
Warren has been especially critical of the Fed’s efforts to roll back bank regulations under Powell’s watch.
Asked on Monday whether the controversy should affect Powell’s reappointment prospects, Senate Banking Chair Sherrod Brown (D-Ohio) said: “That’s up to the president.”