Elizabeth Warren says Jerome Powell should no longer be fed a chair
Sen. Elizabeth Warren (D-Mass.) said Sunday that Jerome Powell should no longer serve as head of the Federal Reserve after the collapse of two U.S. banks under his watch earlier this month.
Warren, who has been critical of Powell for years, most recently over his decision to keep raising interest rates to curb inflation, said he has not been effective in carrying out the agency’s mandates.
“He’s had two jobs,” Warren told NBC’s “Meet the Press.” “One is to deal with monetary policy. One is to deal with regulation. He has failed in both.”
Asked if she would urge President Joe Biden to replace him, Warren replied: “Look, I don̵[ads1]7;t think he should be chairman of the Federal Reserve. I have said it as publicly as I know how to say it. I’ve told everyone.”
The Fed, which reportedly knew about problems at California’s Silicon Valley Bank for at least a year, has launched an investigation into what led to the bank’s demise. The findings are expected to be published in early May. (BuzzFeed, HuffPost’s parent company, banked with SVB.)
Warren has also asked Powell to withdraw from the review.
The Democratic senator criticized a 2018 law backed by Powell that repealed parts of the Dodd-Frank Act regulations on mid-sized banks implemented after the 2008 financial crisis for contributing to the collapse of SVB and New York’s Signature Bank.
Republicans and some Democrats have defended their support for the legislation, which was signed by then-President Donald Trump in 2018.
“Jerome Powell just took a flamethrower to the regulations, weakened them, weakened them, weakened them, weakened dozens of regulations,” Warren said. “And then the CEOs of the banks did exactly what we expected. They loaded on risk that increased their short-term profits. They gave themselves huge bonuses and salaries and blew up their banks.”
Now, Warren and California Rep. Katie Porter (D), along with other Democrats, are calling for those safeguards to be put back in place.
Biden has also urged congressional lawmakers to make it easier for regulators to punish executives at failed banks.
“When banks fail due to mismanagement and excessive risk-taking, it should be easier for regulators to recover compensation from executives, to impose civil penalties and to ban executives from working in the banking industry again,” he said.
Meanwhile, the Fed is expected to announce its next interest rate decision this week. Powell is holding a press conference the same day, where he is expected to be asked about the failed banks.
Warren said the Fed should not raise interest rates further, adding that Powell also has a responsibility to ensure full employment.
“He has a dual mandate,” Warren told NBC’s Chuck Todd. “Yes, he is responsible for managing inflation, but he is also responsible for employment.”
Powell, who was first appointed to the Fed’s board by then-President Barack Obama and then nominated for the chairman role by Trump, was reappointed to the job by Biden in 2021. But Warren voted against him, after calling him “a dangerous man” for to lead the organization.
