Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Senate Banking Committee to Vote on Fed Nominees on March 29

March 26 (Bloomberg) -- The Senate Banking Committee plans to vote on President Barack Obama’s two nominations to the Federal Reserve Board of Governors on March 29, according to a statement posted on the committee’s website today.

Committee approval would move Jerome Powell, a former private equity manager and Treasury undersecretary under President George H.W. Bush and Jeremy Stein, a Harvard University economist and former adviser to Treasury Secretary Timothy F. Geithner, a step closer to taking seats on the board. They would still require a favorable vote by the full Senate.

“Both these guys will get support from the Democrats and the question is whether they get support from Republicans,” said Mark Calabria, an economist and the director of financial studies at the Cato Institute and a former senior aide for Republicans on the Senate Banking Committee.

Stein and Powell, a Democrat and a Republican, would bring expertise on financial markets to the Fed’s board, filling a void left by Kevin Warsh, a former Morgan Stanley banker and confidante of Chairman Ben S. Bernanke. Warsh resigned from the board in April.

With that background, “these are guys you would normally say wouldn’t have a hard time,” said Calabria. “There are issues here that go beyond simply the personal qualifications,” he said, referring to the difficulty of moving nominations through the Senate during a presidential election year.

Stein and Powell wouldn’t be the first Fed nominees in recent years to fall victim to presidential politics. Fed Governor Randall Kroszner, a University of Chicago Booth School of Business professor, joined the Fed in 2006 and was renominated for a full 14-year term in 2007 by President George W. Bush. The Democratic-controlled Senate declined to act on Kroszner’s re-nomination.

Hold a Vote

Christopher Dodd, a Connecticut Democrat and chairman of the Senate Banking Committee at the time, said in 2007 that he was reluctant to hold a vote on Kroszner’s 14-year term given the possible change in party control of the White House.

Stein and Powell testified to the committee last week that the Fed must withdraw their record monetary stimulus in a way that keeps prices stable and doesn’t jar financial markets.

Powell, 59, told the committee he sees “tremendous risk in the exit,” responding to questioning on the central bank’s balance sheet. “You don’t want to do it too early and snuff out a recovery that’s still weak and you don’t want to do it too late and cause inflation,” he said.

Stein, 51, has published academic research on the central bank’s exit strategy. In January, he and Anil Kashyap, a professor at the University of Chicago Booth School of Business, published a paper on “The Optimal Conduct of Monetary Policy with Interest on Reserves.”

Tightening Policy

The paper, appearing in the American Economic Journal, looked at how the Fed can use interest on reserves to control interest rates once the central bank begins tightening policy.

Stein told the panel that the central bank’s eventual tightening of policy must avoid having a “disruptive impact on markets.”

Powell would fill the term vacated by former Fed governor Frederic Mishkin which expires in 2014. Stein would fill Warsh’s seat that lasts through 2018.

Even if they pass committee, nominees for positions at the Fed, the Federal Deposit Insurance Corp. and the Comptroller of the Currency have been in limbo since Obama in January used a recess appointment to install Richard Cordray as the first director of the Consumer Financial Protection Bureau without formal Senate approval.

The president made the appointment of Cordray after Republicans blocked his confirmation in December. While the Democrats control 53 votes in the 100-member chamber, Senate leaders needed at least 60 senators to advance the nomination.

To contact the reporter on this story: Joshua Zumbrun in Washington at;

To contact the editor responsible for this story: Christopher Wellisz at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.