Biden’s three Fed nominees vow to tackle inflation while sustaining recovery

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Biden’s three Fed nominees vow to tackle inflation while sustaining recovery
 
Washington: All three of US President Joe Biden’s nominees to join the Federal Reserve board have vowed to reduce high inflation if they are confirmed by the Senate, while sustaining the economic recovery.

“I want to recognize the toll inflation exacts on working people who are concerned about how far their paychecks will go for essentials like food, housing, and transportation,” Sarah Bloom Raskin, a former Fed governor and Biden’s nominee as the Fed’s vice chair for supervision, said at a hearing before the Senate Banking Committee.

“It is an important task of the Federal Reserve to reduce inflation and one that must be a top priority while we continue to sustain our economic growth,” Xinhua news agency quoted Raskin as saying.

Lisa Cook, a professor of economics and international relations at Michigan State University and Biden’s nominee as the Fed governor, said she agreed that the central bank’s most important task is tackling inflation.

“High inflation is a grave threat to a long, sustained expansion, which we know raises the standard of living for all Americans and leads to broad-based, shared prosperity. That is why I am committed to keeping inflation expectations well anchored,” Cook said at the hearing.

In response to a question asked by Patrick Toomey, the top Republican on the Senate Banking Committee, Cook said that she agreed with the Fed’s policy path “right now”, but declined to say how to keep inflation under control.

“When we get to a decision point, I would look to the data, the evidence, that would be made available at that time,” Cook said.

Philip Jefferson, dean of faculty at Davidson College and Biden’s nominee as the Fed governor, said at the hearing that the spike in inflation threatens to heighten expectations of future inflation.

“The Federal Reserve must remain attentive to this risk and ensure that inflation declines to levels consistent with its goals,” Jefferson said.

The consumer price index rose 7 per cent in December from a year earlier, the largest 12-month increase since June 1982 and well above the Fed’s inflation target of 2 per cent, according to the US Labor Department.

Democrats have praised Biden’s three Fed nominees, while Senate Republicans have expressed strong opposition to the nominations of Raskin and Cook.

In his opening statement at the hearing, Toomey claimed that Raskin want to “misuse bank regulation” to impose environmental policies that Congress has refused to enact.

Citing Cook’s “extreme left-wing political advocacy,” Toomey also said he was concerned that Cook would “further politicize” the Fed that must remain apolitical.

Biden announced his nominations of the three Fed officials in January as he seeks to reshape the central bank amid bumpy economic recovery.

In November last year, Biden announced that he intended to nominate Jerome Powell for a second term as Fed chair and to nominate Fed governor Lael Brainard as vice chair. These nominees all require confirmation in the Senate.


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