Elizabeth Warren tells Fed chair he is ‘dangerous’ and opposes renomination

The Senator said Jerome Powell’s policies have weakened US banking regulations and could lead to another financial crisis

Senator Elizabeth Warren called the chairman of the Federal Reserve, Jerome Powell, “a dangerous man” on Tuesday and vowed to oppose his renomination.

In remarks during a hearing before the Senate banking committee, Warren said that under Powell the Fed had watered down post financial-crisis bank regulations and weakened the US banking system.

“Your record gives me grave concerns,” the Massachusetts Democrat said. “Over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination.”

Powell did not respond.

Warren said deregulation could trigger a meltdown in financial markets similar to the one the US experienced during the 2008-09 crisis.

She said Powell had been “lucky” that banks thus far had been able to avoid major problems.

“So far, you’ve been lucky,” she said. “But the 2008 crash shows what happens when the luck runs out.

“The seeds of the 2008 crash were planted years in advance by major regulators like the Federal Reserve that refused to rein in big banks. I came to Washington after the 2008 crash to make sure nothing like that would ever happen again.”

Powell has been Fed chair since 2018 and Wall Street widely expects Joe Biden to renominate him when his term expires in February, despite opposition from Warren and other liberal senators.

Warren’s comments came as Powell and the treasury secretary, Janet Yellen, warned the US faces an imminent crisis if Congress does not agree to raise government borrowing limits.

Some Republicans have said they will not back an increase in the debt ceiling, and on Monday blocked a bill that would have raised the borrowing limit and funded the government.

If the standoff continues, Yellen told the Senate, the US treasury would be unable to pay all the government’s bills by 18 October.

“At that point,” she said, “we expect [the] treasury would be left with very limited resources that would be depleted quickly. It is uncertain whether we could continue to meet all the nation’s commitments after that date.”

Contributor

Dominic Rushe

The GuardianTramp

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