Sen. Elizabeth Warren, a Democrat from Massachusetts, on Tuesday went to the Senate floor to sharply criticize Fed Chairman Jerome Powell for his failure of leadership in response to the brewing insider-trading scandal at the central bank.
Warren said a Fed chairman has the responsibility to make sure that safeguards are in place to prevent self-dealing at the central bank and have a “quick and aggressive” response to any problems.
“Chair Powell has failed at both tasks,” Warren said.
Late last month, Warren announced she wouldn’t vote to give Powell a second-term at the central bank. She called him “a dangerous man” for easing the government’s strict oversight over the nation’s biggest banks.
“That is not his only failure, Chair Powell has also failed as a leader, Warren said on Tuesday.
The Fed has said that the trading activities of its top officials did not violate the central bank’s ethics rules. Two officials, Dallas Fed President Rob Kaplan and Boston Fed President Eric Rosengren have already announced their resignations. Fed Vice Chairman Richard Clarida has yet to comment publicly about his trading out of a bond fund and into two stock funds in February 2020.
On Monday, the Fed announced it has asked its Office of Inspector General to conduct an independent review of the trading scandal that has grown to include three top Fed officials.
The White House has yet to comment on whether President Joe Biden will nominate Powell for a second four-year term once his current term expires at the end of January.
Earlier Tuesday, Treasury Secretary Janet Yellen said Biden has not made a decision on whether to renominate Powell, saying the president would be talking to “many people.”
A report over the summer from Bloomberg News, quoting unidentified sources, said Yellen has told White House officials she supports giving Powell a second-term, but the Treasury Secretary did not give Powell any endorsement in her comments during a CNBC interview.
Ian Katz, a financial analyst with research firm Capital Alpha Partners, said he still thinks that Powell “is more likely to be renominated than not.” But he added the “drip-drip-drip” of bad news…are unhelpful.”
“If Biden is going with Powell, he might want to make that announcement soon,” Katz said.