Federal Reserve Nominees in Limbo as Republicans Boycott Vote

Mar 11, 2022Federal Regulation, News

Several of President Biden’s nominees to various agencies, including the Federal Reserve Board of Governors and Federal Housing Finance Agency, are being held up after Republicans on the Senate Banking Committee boycotted a key vote, denying the quorum needed to move them forward.

The delayed nominations include Jerome Powell for a second term as Fed chairman, Lael Brainard as vice chair, Lisa Cook and Philip Jefferson as Fed governors, and Sarah Bloom Raskin as the Fed’s top banking regulator.

Raskin’s nomination is the most contentious and the basis of the boycott, since Republicans are pressing for answers as to whether she used her central bank connections to help Reserve Trust, a Colorado fintech company, gain access to a lucrative Fed account in 2018. Democrats have bundled the five officials together, which means none can proceed until Republicans end the boycott.

Senator Sherrod Brown (D-Ohio), Chairman of the Senate Banking Committee, defended Raskin and the other nominees, saying, “we have five outstanding nominees for the Federal Reserve. They’re ready to get to work fighting inflation… This is not the moment for political stunts.”

Senator Pat Toomey (R-Pa.), top Republican on the Senate Banking Committee, warned that if Raskin is confirmed, she would “choke off credit” to fossil fuel companies. He stated that he and his colleagues are ready to vote on the other nominees.

In their meeting this month, Fed policymakers are expected to start raising interest rates in an attempt to lower inflation, which will proceed regardless of whether the confirmation boycott is resolved; thus, Democrats are pushing for a speedy resolution. However, Toomey said in a statement that the Fed “is fully functional. The FOMC has nine of its 12 members in place. They could raise rates today if they wanted to.”

According to NPR, inflation is at its highest level in almost 40 years. In January, consumer prices were up 7.5 percent from the year prior. “We need to do our jobs and move the President’s historic slate of Federal Reserve nominees. The American people want action to fight inflation,” Brown said.

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