Sen. Elizabeth Warren (D-Mass.) on Sunday said Jerome Powell should no longer chair the Federal Reserve following the collapse of two U.S. banks under his watch earlier this month.
Warren, who has been critical of Powell for years, most recently over his decision to continue raising interest rates to curb inflation, said he has not been effective at carrying out the agency’s mandates.
“He has had two jobs,” Warren told NBC’s “Meet the Press.” “One is to deal with monetary policy. One is to deal with regulation. He has failed at both.”
Asked if she would call on President Joe Biden to replace him, Warren replied: “Look, I don’t think he should be chairman of the Federal Reserve. I have said it as publicly as I know how to say it. I’ve said it to everyone.”
The Fed, which reportedly knew about 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 by early May. (BuzzFeed, HuffPost’s parent company, banked with SVB.)
Warren has also called on Powell to recuse himself from the review.
The Democratic senator criticized a 2018 law, supported by Powell, that repealed parts of the Dodd-Frank Act regulations on midsize banks implemented following the 2008 financial crisis, for contributing to the collapse of SVB and New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 by then-President Donald Trump in 2018.
“Jerome Powell just took a flamethrower to the regulations, weakened them, weakened them, weakened them, weakened dozens of the regulations,” Warren said. “And then the CEOs of the banks did exactly what we expected. They loaded up on risk that boosted their short-term profits. They gave themselves huge bonuses and salaries and exploded their banks.”
Now Warren and California Rep. Katie Porter (D), along with other Democrats, are calling for those safeguards to be put back in place.
Biden has also urged congressional lawmakers to make it easier for regulators to punish executives at failed banks.
“When banks fail due to mismanagement and excessive risk taking, it should be easier for regulators to claw back compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again,” he said.
Meanwhile, the Fed is expected to announce its next interest rates decision this week. Powell will hold a press conference on the same day, where he is expected to be asked about the failed banks.
Warren said the Fed shouldn’t raise interest rates further, adding that Powell also has a responsibility to ensure full employment.
“He has a dual mandate,” Warren told NBC’s Chuck Todd. “Yes, he is responsible for dealing with inflation, but he is also responsible for employment.”
Powell, who was first appointed to the Fed’s Board of Directors by then-President Barack Obama and then nominated for the chairman’s role by Trump, was reappointed to the job by Biden in 2021. But Warren voted against him, having previously called him “a dangerous man” to lead the organization.