Powell Hints at SLR Relief, Stays Course on Payments/CBDC
As usual, Senate Banking’s hearing today with Chairman Powell strayed from monetary policy and post-pandemic prospects to a range of financial-policy critical questions. Although Vice Chairman Quarles last year said that the Fed would not extend the SLR exemption (see Client Report RESCUE77) past its March 31 deadline, Chairman Powell was non-committal. Chairman Brown (D-OH) insisted that any SLR exemption come with a ban on capital distributions, emphasizing also his view that the FRB has played a strong role exacerbating U.S. economic inequality in concert with self-interested actions by corporate America and Wall Street. Ranking Member Toomey (R-PA) did not take the Fed on in terms of equality, but he insisted that the central bank has strayed far from its mission and should quickly normalize rates and its portfolio.