Elizabeth Warren calls Fed Chair Powell a 'dangerous man' and vows to oppose his renomination
- Elizabeth Warren told Fed Chair Jerome Powell he's a "dangerous man" and should not be renominated.
- She said Powell has weakened oversight over big banks and has made the banking system unsafe.
- Other progressives voiced similar concerns, saying a more climate-focused person should run the Fed.
Democrats are split over whether the current chair of the Federal Reserve, Jerome Powell, should be nominated for another term.
But Massachusetts Sen. Elizabeth Warren made her stance very clear on Tuesday: She will oppose a second term for Powell over what she views as weakness on regulating Wall Street.
"Your record causes me grave concern: over and over you have acted to make our banking system less safe," Warren told Powell during a Senate banking hearing. "That makes you a dangerous man to head up the Fed, and that's why I'll oppose your renomination."
Powell joined Treasury Secretary Janet Yellen to testify before the Senate on how they are working to ensure an equitable recovery from the pandemic. But, as Warren noted, the "elephant in the room" was whether Powell would be nominated and confirmed by the Senate for a second term leading the Fed. She said his policies during his first term makes him unfit for renomination.
Specifically, she called out Powell for weakening stress tests, which were designed to determine whether banks can survive without taxpayer dollars. She said that in 2019, the Fed began giving banks the information they would need to pass the tests. While the Fed said its aim in sharing that information was to appear transparent, Warren argued it weakened Fed oversight over those banks.
Powell disagreed with that assessment, and he said during the hearing he didn't think the stress test had been weakened during his term and that he's "prepared to look at anything we did" that would suggest otherwise.
Warren has not been alone in opposing Powell's renomination. Insider reported last month that progressives in the House, including New York Rep. Alexandria Ocasio-Cortez, urged President Joe Biden to oust Powell in exchange for a more climate and equality-focused central bank.
A collection of 22 economic, labor, and racial justice organizations also wrote to Biden last month urging him to consider a Fed chair who more heavily prioritizes climate change, full employment, and fighting systemic racism.
But other Democrats disagree. Jon Tester, a centrist Democrat from Montana, told the Wall Street Journal that a Fed chair "should not be involved in the political footballs thrown around on Capitol Hill."
"That's the reason I want Jerome Powell," Tester added. "He's proven he can maintain the independence of the Fed."
Powell's term is set to end in February, and despite progressive opposition, Bloomberg reported that Biden advisers are leaning toward recommending him for a second term.
Warren adamantly disagreed with that during the hearing. "Re-nominating you means gambling that for the next five years, a Republican majority at the Federal Reserve with a Republican chair, who has regularly voted to deregulate Wall Street, won't drive this economy over a financial cliff again," Warren told Powell. "And with so many qualified candidates for this job, I just don't think that's a risk worth taking."