Senate Banking Chair: Fed Can Return to Normal Only After Powell Probe Ends

The Financial News, New York – Reporter Byung-chul LeeSenator Tim Scott said on the 11th (local time) that he hopes the federal investigation into Federal Reserve System (Fed) Chair Jerome Hayden Powell will be concluded quickly.
Scott, who chairs the United States Senate Committee on Banking, Housing, and Urban Affairs, stated in an interview with Consumer News and Business Channel (CNBC), "The Fed cannot function normally or refocus on its policy goals until the investigation process is over." He stressed that only after that can the Senate move forward with the confirmation process for Kevin Warsh, whom President Donald John Trump has nominated as the next Fed chair.
Republican Senator Thom Tillis is maintaining his position that all Federal Reserve nominations should be put on hold until the federal criminal investigation into Powell is resolved. While expressing support for Trump’s nominee Warsh, Tillis argued, "This issue is not about any particular individual, it is about the process," adding, "The fundamental principle of Federal Reserve independence is at stake."
President Donald Trump has repeatedly raised the possibility of dismissing Powell, sharply criticizing him for not cutting interest rates enough. Powell has denied any illegal conduct and has claimed he is under political pressure because he refused to comply with the president’s demands.
Powell’s term is set to end this coming May. He had originally been scheduled to testify before Congress in February, but is reported to have been unable to appear because of the federal investigation. Scott said, "I urged Powell to come before the committee and testify, but right now he is more focused on the criminal proceedings."
Senator Kevin Cramer, also a member of the United States Senate Committee on Banking, Housing, and Urban Affairs, predicted that some Democratic senators may support Warsh’s nomination. "There is very little in what Warsh has said or done that Democrats would find objectionable," he said, adding, "We need to move ahead with the confirmation process so there is no gap between the end of Powell’s term and the start of the next chair’s."
Jim Banks, another member of the same committee, also urged swift confirmation of Warsh. He wrote on social media, "Warsh understands how important it is to bring down high inflation and interest rates," and added, "The Senate should confirm him as quickly as possible."
Meanwhile, the investigation into Powell reportedly includes issues related to testimony he gave before the Senate Banking Committee last year. Scott commented, "It is true that Powell was not fully prepared at the time, but that does not mean he committed a crime."


pride@fnnews.com Reporter Byung-chul Lee Reporter