After a placid hearing before the Senate Banking Committee, Jerome Powell’s confirmation to lead the Federal Reserve seems increasingly like a formality.
WASHINGTON — Jerome Powell, nominated by President Donald Trump to lead the Federal Reserve, presented himself as a pragmatic moderate who would largely continue the Fed’s current policies at a confirmation hearing before the Senate Banking Committee on Tuesday.
Powell, a Fed governor since 2012, defended the Fed’s approach to financial regulation. He told Democrats that he saw no need for stronger rules, and he told Republicans he did not favor rolling back most existing ones, though he did endorse easing the burden on smaller banks.
Powell also pledged to continue the Fed’s current approach to monetary policy, by gradually raising interest rates so long as economic growth remains healthy.
He stopped just short of confirming that the Fed intends to raise its benchmark interest rate in December, a move that is widely expected by financial investors.
“I think that the case for raising interest rates at our next meeting is coming together,” he said.
Powell, 64, is a lawyer by training and an investment banker by trade, with deep roots in the financial industry and the Republican Party. Since joining the Fed, he has voted in favor of every policy decision — both monetary policy and regulatory policy — under the current Fed chair, Janet Yellen, and her predecessor, Ben Bernanke.
Trump nominated Powell in early November to succeed Yellen, whose four-year term ends in early February.
The position is subject to Senate confirmation, but after Tuesday’s hearing, that appears increasingly like a formality.
Some Democrats have indicated they might oppose the nomination. But, more important, Powell drew little opposition from conservative Republicans who opposed both his nomination as a Fed governor in 2012 and his reappointment in 2014. Sen. Dean Heller, R-Nev., who voted against Powell both times, said he was trying to get to yes.
Trump said he was replacing Yellen because he wanted to appoint his own chairman. Powell in his opening statement pledged to resist any political pressure.
He added that he had no reason to anticipate such pressure from the White House.
“Nothing in my conversations with anyone in the administration has given me any concern on that front,” he said.
His plan, he said, is to make policy decisions “with a view solely to right answers.”
The confirmation hearing was a relatively placid affair, with only a third of the seats in the hearing room occupied.
Powell spent much of the hearing avoiding questions about fiscal policy, including tax legislation that currently commands most of the attention on Capitol Hill.
On regulation, Powell said that post-crisis changes have made the financial system stronger, but that those regulations were unnecessarily uniform.
He said he favored reduced regulation of smaller banks.
“Tailoring of regulation is one of our most fundamental principles,” he said. “We want it to decrease in intensity and stringency as we move down” to smaller banks.
He said the Fed was taking “a fresh look” at those rules.
Powell’s stance creates some distance from the Trump administration, which has described bank regulations as an ineffective impediment to growth.
It also created some friction with Democrats, who see a continuing need for stronger regulations.
Sen. Elizabeth Warren, D-Mass., asked Powell if there were rules that should be strengthened. Powell responded that he favored stronger enforcement in some areas, but that he did not see a need for stronger rules.
“I do think we’ve had eight years now of writing new rules and honestly I can’t think of a place now where we are lacking,” he said. “I think they’re tough enough.”
Senators asked few questions about monetary policy, a tacit endorsement of the Fed’s success under Yellen. Unemployment has fallen to 4.1 percent and inflation remains below 2 percent.
Some Republicans argue the Fed should have raised interest rates more quickly.
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Powell said he does not agree.
“We’ve been patient in removing accommodation and I think that patience has served us well,” he told the committee.
Powell, who would become the first noneconomist in several decades to lead the central bank, also sounded confident in his own abilities to steer policy.
“You’re about to become the most important economic policymaker in the world,” Heller asked. “How do you feel about that?”
Responded Powell, “I feel fine.”