FedFin Assessment:  Powell Sidesteps Many Challenges, Promises Much

As promised yesterday (see Client Report FEDERALRESERVE66), we listened closely today to gauge the extent to which Chairman Powell faces a serious challenge to reconfirmation.  At least as far as Senate Banking Members are concerned, he doesn’t.  Although Sen. Warren (D-MA) and other Democrats lambasted Mr. Powell over insider-trading allegations and what they called the Fed’s unresponsiveness, all still were cordial and seemed generally to blame the problem on institutional failures, not the chairman.  Sen. Menendez (D-NJ) called the Fed’s diversity policy “outrageous,” but also does not seem inclined to block confirmation based solely on this issue.  As anticipated, most senators focused on inflation and the economy; Mr. Powell often reflected this by affirming that the Fed will soon cease to be quite as accommodative.  Senate Banking Chairman Brown (D-OH) urged Mr. Powell not to let up on economic stimulus, also complaining about big-bank consolidation, capital distribution, bank profits, and the need for more lending to “Main Street.”