Progressive Democrats called on President Joe Biden to replace Federal Reserve Chairman Jerome Powell in hopes of changing the central bank’s mission, CNN reports.
“We urge President Biden to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice,” Reps. Alexandria Ocasio-Cortez, Rashida Tlaib, Ayanna Pressley, Mondaire Jones, and Chuy Garcia said in a joint statement.
“While the Federal Reserve has made positive changes to its approach to full employment reflected in the new monetary policy framework,” the lawmakers said, the Fed has “taken very little action to mitigate the risk climate change poses to our financial system.”
“Secondly, under Chair Powell the Federal Reserve has substantially weakened many of the reforms enacted in the wake of the Great Recession regulating the largest banks, including capital and liquidity requirements, stress tests, the Volcker Rule, and living will requirements,” the statement continued. “During the 2008-financial crisis, millions of Americans lost their homes and jobs, and many have failed to fully recover. Weakening financial regulations that were specifically created to prevent such a disaster from happening again, risks the livelihoods of Americans across the country.”
Powell’s term set to expire in February:
Powell, who was appointed by former President Donald Trump, is serving a term that will expire in February. The White House has not made any announcement on whether Biden will re-appoint him.
Powell, who was repeatedly criticized by Trump after the appointment, used the Federal Reserve’s powers to boost businesses throughout the pandemic and has helped sharply reduce unemployment amid the recovery.
Despite the progressives’ concerns, the Fed under Powell joined an international network of global financial regulators focused on climate change last year.
Earlier this year, Powell warned that the climate crisis poses "profound challenges for the global economy and certainly the financial system."
Powell likely to be reappointed:
Powell, who was first appointed to the Fed board by former President Barack Obama, has been criticized by progressive senators like Elizabeth Warren and Sherrod Brown over the central bank’s deregulatory push.
But he has also drawn widespread bipartisan support, including from Sen. Steve Daines, the Montana Republican, and Dick Durbin, the No. 2 Democrat in the Senate.
Treasury Secretary Janet Yellen has privately backed Powell’s reappointment.