Federal Reserve Chairman Jerome Powell was confirmed for a second four-year term Thursday by the Senate.
President Joe Biden said he would reappoint Powell back in 2021, a decision that won bipartisan support from the Senate despite concerns over inflation and interest-rate increases, according to the Wall Street Journal (WSJ). The Fed raised interest rates twice already this year and is expected to do so again in half-point increments until the central bank sees inflation slow, the WSJ noted. (RELATED: Biden To America: Your Frustration … ‘I Can Taste It’)
Economists have criticized Powell’s descriptions of price increases as temporary and his decisions to withdraw stimulus slowly, the outlet continued. Powell said in a press conference in March that, in hindsight, it “would have been better for us to have raised rates sooner,” but only if the Fed had foreseen that the pandemic economy’s supply disruptions would last as long as they ultimately did.
Americans Aren’t Buying Biden’s Tale Of Economic Recovery https://t.co/jOZJmn48A3
— Daily Caller (@DailyCaller) April 28, 2022
“If we think it’s appropriate to raise [by a half point] at a meeting or meetings, we will do so,” he said in an economics conference in March, according to the WSJ. Powell noted that the war in Ukraine and the COVID-19 have created uncertainty for the Federal Reserve, and said he was willing to move “beyond common measures” to combat inflation.
Critics have argued that these more aggressive moves could have been avoided had officials not waited to withdraw stimulus last year, the WSJ reported.
Consumer prices rose by 6.6% in March when compared to the same time period in 2021, the WSJ noted. Despite inflation edging down to 8.3% in April, it remains at the fastest pace in four decades, the outlet noted.
“As part of restoring its credibility, the Fed needs to engage in some kind of after-action report that tries to analyze why they … were as wrong as they were in assessing the inflation risk and judging inflation to be transitory during 2021,” former Treasury Secretary Lawrence Summers told the WSJ in an interview in early May.