They acknowledged that the Fed under Powell “made positive changes” by pushing the central bank to put more emphasis on full employment. But they said they wanted to see someone at the helm who was more aggressive about financial regulation and climate change.
“Under his leadership, the Federal Reserve has taken very little action to mitigate the risk climate change poses to our financial system,” said Ocasio-Cortez (NY), Tlaib (Mich.) And Pressley (Mass.) , which all sit. member of the House Financial Services Committee.
“At a time when the Intergovernmental Panel on Climate Change warns of the potential catastrophic and irreversible damage caused by climate change, we need a leader at the helm who will take bold and decisive action to eliminate climate risk, ”they said.
They also cited the steps the Fed took under Powell to reduce regulations on big banks, for example giving them more leeway to make risky transactions and more information up front on tests that examine whether they could withstand another major economic downturn.
“The weakening of financial regulations specially created to prevent such a catastrophe from happening again puts the livelihoods of Americans across the country at risk,” lawmakers said. “To move forward with a whole-of-government approach that eliminates climate risk while making our financial system more secure, we need a chair committed to these goals. “
The three representatives cite no particular alternative to Powell, but the most prominent candidate to replace him is Lael Brainard, a current Fed board member who is expected to continue what Democrats like about the politics of Powell’s interest rate while being closer to their stance on issues such as regulation and climate change.
The statement by lawmakers comes after 22 liberal groups also came together to urge Biden to choose Federal Reserve leaders who will change the central bank’s approach to these same issues, though they have ceased to object by name. to Powell.
This letter implicitly referred to the possibility of Biden appointing an aggressive regulator to replace outgoing oversight vice president Randal Quarles, to address one of the main progressives’ complaints that the Powell Fed has been too lenient. But they suggested that appointing a more liberal person to the post would not be enough.
“We encourage you to remember that the Fed is a hierarchical institution, in which the vice president and the vice president of oversight wield considerable power over the agenda, but are ultimately deferential to the initiatives of the presidency.” , they said.