Senator Elizabeth Warren (D-Mass.) on Friday said Jerome Powell is no longer chairman of the Federal Reserve after the collapse of two US banks on his watch earlier this month.
Warren, who has criticized Powell for years, most recently over his decision to keep raising interest rates to curb inflation, said he has not effectively carried out the agency’s mandate.
“He has two jobs,” Warren told NBC’s “Meet the Press.” “One is to deal with monetary policy. One is to deal with regulation. They have failed on both fronts.
Asked if he would call President Joe Biden to replace him, Warren replied: “Look, I don’t think he should be chairman of the Federal Reserve. I’ve said it publicly as I know how to say it. I’ve said it to everybody.”
The Fed, which has reportedly been aware of problems at California’s Silicon Valley Bank for at least a year, has launched an investigation into what led to the bank’s demise. The findings are expected to be published in early May. (BuzzFeed, HuffPost’s parent company, banked with SVB.)
Warren also asked Powell to recuse himself from the review.
Democratic senators criticized the 2018 law, supported by Powell, which repealed part of the Dodd-Frank Act regulations on midsize banks implemented after the 2008 financial crisis, as it contributed to the collapse of SVB and New York’s Signature Bank.
Republicans and some Democrats have defended their support of the legislation, which was signed into law by President Donald Trump in 2018.
“Jerome Powell just took a flamethrower to regulations, weakened them, weakened them, weakened them, weakened dozens of regulations,” Warren said. “And the CEOs of the banks did what they wanted. They took risks that increased their short-term profits. They gave them big bonuses and salaries and blew up their banks.
Now Warren and California Rep. Katie Porter (D), along with other Democrats, called for those safeguards to be put back in place.
Biden also called on congressional lawmakers to make it easier for regulators to punish executives at failed banks.
“When banks fail due to mismanagement and taking too great a risk, it should be easier for regulators to claw back compensation from executives, to impose civil penalties, and ban executives from working in the banking industry again,” he said.
Meanwhile, the Fed is expected to announce its next interest rate decision this week. Powell will hold a press conference the same day, where he will be asked about the failed banks.
Warren said the Fed should not raise interest rates again, adding that Powell also has a responsibility to ensure full employment.
“He has a dual mandate,” Warren told NBC’s Chuck Todd. “Yes, they are responsible for dealing with inflation, but they are also responsible for employment.”
Powell, who was first appointed to the Board of Directors of the Fed by then President Barack Obama and then nominated for the role of chairman by Trump, was reappointed to the job by Biden in 2021. But Warren voted against him, before calling him “a”. dangerous person” to lead the organization.