FEDERAL RESERVE - WASHINGTON. U.S. Federal Reserve Chair Jerome Powell faced an uncharacteristically hostile congressional hearing on Tuesday in which lawmakers demanded more action in response to perceived lapses over everything from ethics and diversity to inflation and financial regulation, and a prominent Democrat said she would not back him for another term.
The most pointed moment came when Senator Elizabeth Warren of Massachusetts, a vocal critic of the Fed's oversight of Wall Street under Powell, called him a "dangerous man" to head the central bank.
"Renominating you means gambling that ... a Republican chair who has regularly voted to deregulate Wall Street won't drive this economy over a financial cliff again," Warren said during a hearing by the Senate Banking Committee. "I just don't think that's a risk worth taking."
For Powell his appearance before the committee - notionally to discuss the Fed's response to the coronavirus pandemic - was the latest chapter in one of the choppier stretches he has endured as the central bank's chief, just as the White House weighs whether to retain him in the role.
On Monday, two of the Fed's 12 regional reserve bank presidents announced their departures, weeks after they were revealed to have been active investors. Powell has launched a sweeping review of the rules governing Fed officials' financial dealings as a result, but it has not stopped the drumbeat of critics who say he should have acted more forcefully.
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Senator Sherrod Brown of Ohio, the committee's Democratic chairman, said he would introduce legislation barring Fed officials from owning individual stocks.
Another Democratic Senator, Raphael Warnock from Georgia, said: "This is a blow to the image of the central bank." He asked Powell about what steps he is taking to protect the "impartiality" of the Fed.
And Republican Senator Steve Daines of Montana asked if Powell would agree to subjecting the heads of the quasi-private regional reserve banks to the Freedom of Information Act to allow for greater public scrutiny of their activities, something Powell said he would like to "reflect on."
Powell said the central bank is also examining the trades done by regional Fed presidents to make sure they were legal and in compliance with current ethics guidelines.
"Even if it appears to be the case that these trades were in compliance with existing rules, that just tells you the problem is the rules and the practices and the disclosure needs to be improved," Powell said in response to Warnock's question. "We will rise to this moment and address this."
