Powell Tries to Deflect GOP Capital Assault
Chairman Powell’s HFSC appearance today led to unusually substantive discussion of pending financial-policy actions. As detailed in this report, Republicans renewed their vigorous campaign against new capital rules, refusing to be put off by Mr. Powell’s assurances that they would apply only to the largest banks, would be phased in, and will have less impact on growth than interest rates. Even though Mr. Powell also said he recognized capital trade-offs and had taken no position on new rules, Chairman McHenry (R-NC) is so opposed to these and other recent proposals from Vice Chairman Barr that his opening statement includes the suggestion of legislation to separate monetary from regulatory policy, presumably moving regulation to another agency perhaps in the manner recently proposed by Sen. J.D. Vance (R-OH). However, neither Mr. McHenry nor other Republicans raised this idea in their questioning, suggesting it is not a near-term legislative-agenda item. What is near-term are mark-ups announced today for the HFSC/Ag bill on crypto jurisdiction strongly opposed by Democrats and the stablecoin bill to which they are considerably more amenable.