The Senate on Thursday confirmed President Obama’s nominees to serve on the Federal Reserve’s influential board of governors, just days before the leaders of the nation’s central bank are slated to convene in Washington.
Former U.S. Treasury official Lael Brainard was approved 61-31, and lawmakers confirmed private equity manager Jerome Powell for a second term in a vote of 67-24.The law has allowed Powell to continue serving on the board even though his term technically expired in January.
In addition, the Senate voted Thursday to appoint Stanley Fischer, former head of the Bank of Israel, as vice chairman of the central bank. He won confirmation to join the board last month.
Fed governors wield enormous power over the country’s financial system and the economy. They approve regulations overseeing the nation’s biggest banks and make up a majority of the Fed committee that sets the benchmark interest rate that influences the cost of everything from mortgages to corporate debt.
Fed officials are scheduled to meet next week to discuss the direction of the recovery and the future of their ongoing efforts to stimulate the economy -- and there will be several new faces around the central bank’s 27-foot mahogany table. The meeting will be the first for Fischer, as well as for the new head of the Cleveland Fed, Loretta Mester. Brainard must still be sworn in before she can participate -- and attendant paperwork must be completed -- but there is a reasonable chance those logistics can be resolved soon.
All three officials are likely to be vocal about their views on how and when the Fed should wrap up its unprecedented stimulus campaign and begin raising interest rates. The central bank is widely expected to reduce its monthly bond purchases by another $10 billion, but some economists are worried the Fed is moving too slowly as the recovery picks up steam.
During his confirmation hearing, Fischer expressed support for the central bank’s current strategy but emphasized the importance of focusing on financial stability. Brainard sounded a slightly more skeptical note in her testimony, noting that the Fed should carefully calibrate its exit plan. Mester has not spoken extensively on monetary policy but hails from the Philadelphia Fed, whose chief has been an outspoken critic of central bank policy.