Fed chief nominee defends regulatory reforms

Mr Jerome Powell echoed the Federal Reserve's many statements on the path of monetary policy and said interest rates are likely to rise a bit more.
Mr Jerome Powell echoed the Federal Reserve's many statements on the path of monetary policy and said interest rates are likely to rise a bit more.

WASHINGTON • President Donald Trump's pick to lead the United States Federal Reserve has defended regulations that made the financial system more crisis-proof, and said interest rates are likely to rise a bit more.

But Mr Jerome Powell, a Fed governor since 2012, also said on Monday that the US central bank will continue to look for ways to ease the regulatory burden on banks and tailor the rules to the size of the institution. "We will continue to consider appropriate ways to ease regulatory burdens while preserving core reforms," he said in a brief opening statement released by the Fed on Monday before his confirmation hearing before the Senate Banking Committee yesterday.

"Our financial system is without doubt far stronger and more resilient than it was a decade ago," he said, adding that the Fed must work with other agencies to "help ensure that our financial system remains both stable and efficient".

However, Mr Trump and Republicans in Congress have been highly critical of the tougher regulations adopted in the wake of the 2008 financial crisis, saying they have gone too far, and impede lending and economic activity.

Mr Powell, 64, who will replace Dr Janet Yellen as Fed chairman if confirmed, said the changes were needed.

The Fed has raised the benchmark lending rate twice this year, and is widely expected to increase it once more next month, despite inflation that is running well below the central bank's 2 per cent target.

Mr Powell echoed the Fed's many statements on the path of monetary policy, saying "we expect interest rates to rise somewhat further".

While he did not give a detailed economic outlook, he said he would work "to support the economy's continued progress towards full recovery", including "a strong jobs market with inflation moving gradually up towards our target".

Referring to the Fed's two goals of promoting maximum employment and maintaining price stability, Mr Powell said: "I will do everything in my power to achieve those goals while preserving the Federal Reserve's independent and non-partisan status that is so vital to their pursuit."

AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on November 29, 2017, with the headline 'Fed chief nominee defends regulatory reforms'. Print Edition | Subscribe