After more than three years in the position, some Democrats are calling for the Biden administration to remove Federal Reserve Chairman Jerome Powell from the influential position.
According to The Hill, progressive lawmakers want President Joe Biden to replace Powell — who was appointed by former President Donald Trump — when his term expires in February.
“Positive changes to its approach”
Reps. Alexandria Ocasio Cortez (D-NY), Rashida Tlaib (D-MI), and Ayanna Pressley (D-MA) released a statement in which they insisted that Biden redefine the nation’s central bank.
Specifically, they advocated for a Federal Reserve that is “focused on eliminating climate risk and advancing racial and economic justice.”
In addition to the three members of the so-called “Squad” on Capital Hill, fellow progressive Reps. Mondaire Jones (D-NY) and Jesus Garcia (D-IL) added their signatures to the statement.
The letter did praise the Federal Reserve for making “positive changes to its approach to full employment reflected in the new monetary policy framework.”
Nevertheless, the Democrats expressed “concerns” about Powell’s leadership, including the perception that he has done little to “mitigate the risk climate change poses to our financial system,” thus resulting in a poor showing on Positive Money’s Global Central Bank Scorecard.
“A whole of government approach”
“At a time when the Intergovernmental Panel on Climate Change is warning of the potential catastrophic and irreversible damage inflicted by a changing climate, we need a leader at the helm that will take bold and decisive action to eliminate climate risk,” the letter asserted.
Furthermore, the progressive legislators took issue with Powell for policies that “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 Volker Rule, and living will requirements.”
Asserting that the nation needs a Federal Reserve chairman dedicated to “a whole of government approach that eliminates climate risk while making our financial system safer,” the letter’s signers called on Biden to replace Powell.
Last month, Reuters published an article indicating that many economists expected the president to grant the chairman another term.
It remains to be seen whether Biden will capitulate to the leftist lawmakers’ demand, but the recent Reuters report suggested that former U.S. Undersecretary of the Treasury for International Affairs Lael Brainard represented the most likely nominee if Powell did not receive another term.