By CHRISTOPHER RUGABER, AP Economics Writer
WASHINGTON (AP) – The Senate on Thursday confirmed Jerome Powell for a second four -year term as chairman of the Federal Reserve, giving bipartisan support to Powell’s high -stakes efforts to curb the highest inflation. in four decades.
The 80-19 vote reflects Congress’s broad support for the Fed’s drive to combat rising prices through a series of sharp interest rate hikes that could extend into next year. The Fed’s goal is to slow borrowing and spending enough to ease inflationary pressures.
Since February, when his first term ended, Powell has led the central bank in temporary capacity.
He faces a difficult and risky task of trying to quell inflation without weakening the economy causing a recession. The job market has remained strong and stabilized at a point that Powell said was “too hot” and contributed to an overheated economy.
Rising prices across the economy are causing pain to millions of Americans whose wages do not keep up with the cost of necessities like food, gas and rent. And the prospect of continued higher interest rates has baffled financial markets, with stock prices falling for several weeks.
Powell’s support on Thursday in the Senate was almost in line with what he received four years ago, after he was first nominated as Chair by President Donald Trump. At the time, the Senate voted 84-13 to confirm him.
Powell’s confirmation comes even as many economists have severely criticized the Fed for waiting too long to respond to worsening inflation, making its task more difficult and risky.
In the past, members of Congress have often opposed higher interest rates for fear that it would lead to unemployment. The consistently high inflation of the 1970s was attributed, in part, to the political pressure that led the Fed to abandon high rate hikes under Presidents Lyndon Johnson and Richard Nixon.
Powell himself suffered harsh criticism from Trump when the Fed raised rates in 2017 and 2018 after the unemployment rate reached a mid-century low of 3.5%. Powell reiterated some of the increases in 2019, following the economic slowdown following Trump’s tariffs on Chinese imports.
This week, Biden said that while he respects the Fed’s independence, he supports its efforts to raise borrowing rates, which has led to rising costs on loans, car loans and business borrowing.
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