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The Republican congressmen of the Banking Committee of the Upper House of the United States delayed a vote on the nominees of the president to the Federal Reserve Board, at a time when the eyes of the financial market are on the next decisions of the monetary authority.
Political polarization in the United States now involves the Federal Reserve (Fed), a relatively independent institution whose decisions concern not only the country itself, but the rest of the world – financially speaking.
For Tuesday, February 15, a session was scheduled in the Senate to vote on President Joe Biden’s nominees to occupy five seats on the Board of Governors of the Fed, among them, the head of the institution, Jerome Powell, who did not has been confirmed in office.
In a kind of “boycott”, none of the 12 Republican congressmen attended the session called by the Banking Committee, made up of 24 members divided equally between Republicans and conservatives, so the vote had to be postponed indefinitely.
We need a full Federal Reserve Board to help our economy recover and fight inflation.
Today, Democrats were ready to vote on five of the most diverse and most qualified Fed nominees ever put forward.
Republicans didn’t show up. #FedFiveNow pic.twitter.com/aq7oBlM1Bf
— Senate Banking and Housing Democrats (@SenateBanking) February 15, 2022
Republicans denounce “revolving door” in one of the nominations
The reason given by the Republican congressmen for not attending the session has to do with the objections they have presented regarding Sarah Bloom Raskin, the one chosen by the White House to be the watchful eye of Wall Street in the Board of the Central Bank.
Specifically, they question Bloom’s role on the board of directors of a financial technology company. She has also been attacked for earlier statements in which she has made clear her support for the use of financial rules to monitor climate change.
Sarah Bloom Raskin’s radical views to choke off capital to the oil-&-gas industry are damning enough, but her lack of transparency requires additional scrutiny from @BankingGOP, not to vote. I will join @SenToomey in opposing holding a vote on her today.
My full statement: pic.twitter.com/mgr7hLyfJ1
— Senator Bill Hagerty (@SenatorHagerty) February 15, 2022
Senator Pat Toomey, the top Republican on the committee, said in turn that “Mrs. Raskin’s repeated and forceful advocacy for allocating Federal Reserve resources and blocking credit to disadvantaged industries is in itself a disqualification and a reason enough to vote against him”.
Monetary policy in suspense?
The uncertainty around the Fed Board does not come at a good time. The monetary authority is facing pressure to raise interest rates for the first time since the start of the pandemic to combat the highest rate of inflation in 40 years.
“Republicans say that inflation is a problem. It’s a big deal, we agree. But then they don’t even bother to show up to vote – even against – these Fed nominees. What message is that sending to the American public?” said government spokeswoman Jen Psaki.
Despite not yet having been confirmed to serve another four years as Fed chairman, Jerome Powell is today acting as chief “pro tempore” and the decision on an upcoming rate hike seems to have been made. However, the confirmation of the other members would clear up many doubts about the path to follow in the medium term.
Contrary to the other four nominees, Powell is fully supported by the majority of Republicans, who helped put him in office during the Donald Trump administration.
With Reuters, AP and EFE