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The
Republican-controlled Senate voted 84-13 to approve the
64-year-old lawyer to a four-year term as Fed chair beginning
early next month.
It was the most lopsided of recent Fed chair votes, signaling
both Powell's bipartisan appeal and the ebbing of some of the
tensions raised by the central bank's aggressive response to the
2007-2009 financial crisis and recession.
Controversy over those Fed policies led to a narrower 56-26 vote
margin when Yellen became chair in 2013, and a 70-30 vote when
former chair Ben Bernanke was named to a second term.
Powell will be "central to ensuring a safe and sound financial
system while supporting a vibrant, growing economy," banking
committee chairman and Idaho Republican Mike Crapo said on the
Senate floor. "He will play a key role in rightsizing federal
regulations and alleviating unnecessary burdens."
Powell takes over as chair with U.S. monetary policy on a steady
course toward gradually higher interest rates and a smaller
balance sheet.
However, a debate is brewing within the central bank about
whether it needs to rethink its approach to inflation and
whether the recent massive tax overhaul legislation will affect
the U.S. economy.
Powell must also decide how far to accommodate a push by the
Trump administration to roll back some post-crisis financial
regulations.
The potential for financial deregulation advocated by the Trump
administration prompted the most pointed opposition to Powell, a
former executive at the Carlyle Group private equity firm whose
credentials as Fed chair are rooted in his understanding of
markets. Powell is not an economist by training.
"We need a Fed chair who can stand up to Wall Street," said
Senator Elizabeth Warren, a Democrat. "That person is not
Governor Powell."
The 12 votes against Powell included both Democrats and some
conservative Republicans.
Powell, 64, was nominated by Trump in November as a largely
uncontroversial pick whose monetary policy views are closely
aligned with Yellen's.
He has served on the Fed's board since 2012 and over time became
supportive of the consensus forged by Yellen for gradual
interest rate increases and a slow decrease in the asset
holdings the Fed accumulated while fighting the crisis, without
abandoning a willingness to take extraordinary steps again if a
crisis recurs.
During a Senate hearing on his nomination in November, Powell
said he would "respond decisively," if necessary, to future
problems.
Powell has never dissented on a monetary policy decision during
his nearly six years at the Fed, though recently released
transcripts of central bank deliberations during 2012 showed his
discomfort at the time with the Fed's massive bond-buying
program.
He later came to see Yellen's go slow approach as important to
helping the jobs market recover and to share her concerns that
low inflation justified a cautious approach to raising interest
rates.
While interest rates have been rising, they remain low in the
context of a 4.1 percent unemployment rate, and on an
inflation-adjusted basis still hover around zero.
The Fed raised interest rates three times last year and
policymakers indicated last month they would likely raise them
three times more this year as part of their gradual campaign to
put policy on a more normal footing.
Initially tapped for the Fed board by then-President Barack
Obama as a moderate Republican, Powell emerged over the fall as
Trump's choice to lead the Fed from a slate of possible nominees
that included both Yellen and some who might have pursued a
sharp policy shift.
The Senate confirmation vote was originally 85-12, but
Democratic Senator Dianne Feinstein changed her vote to a "no."
Aides to Feinstein were not immediately available to comment on
the senator's decision.
(Reporting by Howard Schneider; editing by Tim Ahmann and Clive
McKeef)
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