AOC calls on Joe Biden to replace Trump-appointed Fed chairman

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New York Representative Alexandria Ocasio-Cortez and other members of the Democratic party’s progressive caucus have urged Joe Biden to replace Jerome Powell as chairman of the Federal Reserve as part of a major makeover of the US central bank.

“As news circulates about the potential reappointment of Federal Reserve Chairman Jerome Powell, we urge President Biden to re-propose a Federal Reserve focused on eliminating climate risks and advancing racial and economic justice.” , they said. said in a statement released Tuesday.

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Signatories to the letter include Representatives Rashida Tlaib of Michigan, Ayanna Pressley of Massachusetts, Mondaire Jones of New York and Chuy Garcia of Illinois.

Powell’s term ends in February. A Republican and former investment banker, he was appointed by Donald Trump in 2017, but the following year he made Trump’s anger after the Fed raised its benchmark rate again. The Biden White House has not said whether Powell will be reappointed, although it is not uncommon for a Fed chairman to be reappointed after a board change.

Powell is widely acclaimed for his swift response to the economic turbulence caused by the coronavirus pandemic. Last week, he indicated that the Fed was ready to ease economic stimulus, but would not raise interest rates just yet.

In the statement, progressives credited Powell for prioritizing the Fed’s full-employment goal, but said the central bank hadn’t done enough to make mitigating the effects of climate change central to its mission.

“Under his leadership, the Federal Reserve has taken very little action to mitigate climate change risk to our financial system,” the statement read, citing the Fed’s “D rating” for its approach to climate risk policy from Positive Money’s Global Central. Bank Scorecard, which placed it at the bottom of the G20 group of leading central banks.

Powell has said the climate crisis poses “major challenges to the global economy and certainly to the financial system” and the Fed joined an international network of global financial regulators focused on climate change late last year.

But that recognition did not go far enough, the caucus indicated.

“At a time when the Intergovernmental Panel on Climate Change is warning of the potential catastrophic and irreversible damage caused by a changing climate, we need a leader at the helm who will take bold and decisive action to eliminate climate risks,” she added. up.

Members also criticized the central bank for reversing certain financial regulations enacted after the Great Recession – actions Powell has taken recognized while it expresses confidence in the stability of the financial system.

The “weakening” of financial regulations created specifically to prevent such a disaster from happening again, they said, “risks the livelihoods of Americans across the country.

“To move forward with a whole-government approach that eliminates climate risks and makes our financial system more secure, we need a chairman who is committed to these goals. We urge the Biden administration to take this opportunity to nominate a new chairman of the Federal Reserve.”

In comments to CNN, a White House official said Biden will “nominate the candidates he believes will be the most effective at carrying out monetary policy” when it comes to reappointing Powell or selecting a new Fed. -chair.