After a months-long political poker game, the Fed finally gets dealt a full house.
The Senate today confirmed President Barack Obama's two nominations for the Federal Reserve Board of Governors, bringing the board back to a full seven members for the first time since 2006. Here's the statement from the White House:
We are pleased that Members of Congress from both parties have come together to confirm Jay Powell and Jeremy Stein as members of the Board of Governors of the Federal Reserve System. Today's broad bipartisan vote in the Senate reflects their deep knowledge of economic and monetary policy, as well as their distinguished backgrounds and unique experience. At this important time for our economy, we are grateful that Mr. Powell and Dr. Stein will serve the American people in these critical positions.
The nominees, Jeremy Stein, a Democrat, and Jerome Powell, a Republican, were confirmed by a bipartisan majority after being held up for several months by Sen. David Vitter, R-La., over concerns about the Fed's monetary easing policies.
While the Fed needs all the help it can get in kickstarting the tepid recovery, the confirmation of Powell and Stein probably won't result in much of a shift in policy right away. Being that both are considered fairly moderate and have expressed approval for the Fed's current policies, they're unlikely to sway the Fed's overall position on interest rates and quantitative easing far from where it stands today.
Here's what the American Bankers Association had to say about the pair.
ABA applauds the Senate for confirming Jeremy Stein and Jerome Powell to the Federal Reserve Board. Their strong backgrounds and extensive experience will prove invaluable as they work on our nation's banking, economic and financial issues. We are also pleased that today’s action will allow the Federal Reserve Board to operate with a full seven members for the first time since 2006.
Speaking of that policy, the minutes from the last Federal Open Market Committee meeting show the Fed firmly in wait-and-see mode. Most of the economic data they had showed modest growth and some gradual improvement in the employment picture, but members worried that might be due in part to more people dropping out of the labor force and an unusually warm spring, rather than any fundamental improvement in the economy.
FOMC members also expressed concern about the worsening economic picture in Europe and worried that federal budget tightening in the U.S. might hurt the economy going forward.
What do you think? Are Stein and Powell a good fit for the Fed?
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