US Senate confirms Jerome Powell for second term as Fed chairman

Central bank faces task of bringing down record-high inflation

The US Senate voted overwhelmingly to confirm Jerome Powell to serve a second term as Fed chairman. Bloomberg

The US Senate on Thursday voted to confirm Jerome Powell to serve as chairman of the Federal Reserve, as the central bank continues to battle the highest inflation rate the country has seen in four decades.

The 80-19 vote reflected broad support in Congress for the Fed’s drive to combat surging prices through sharp interest rate rises that could extend well into next year.

US President Joe Biden, who in recent days has said fighting inflation is his biggest domestic priority, welcomed Mr Powell's confirmation.

"I am pleased to see the Senate take a step forward on my agenda to get inflation under control by confirming my nominees to the Fed," Mr Biden said.

The Senate has already voted to confirm Dr Lisa Cook and Dr Philip Jefferson to serve on the central bank's board. Lael Brainard was confirmed to serve as the Fed's vice chairwoman.

"The Federal Reserve plays a primary role in fighting inflation, and these well-qualified members of the Board will bring the skill and knowledge needed at this critical time for our economy and families across the country," Mr Biden said.

The president previously said he would respect the independence of the Fed, and supported the central bank's efforts in raising borrowing rates.

The Fed last week raised its short-term interest rate by 50 basis points, its most aggressive decision since 2000.

Mr Powell's confirmation comes as many economists have criticised the Fed for waiting too long to respond to worsening inflation, making its task harder and riskier.

The Fed chairman for months repeated his belief that inflation was "transitory" and would ease as supply chain bottlenecks opened back up.

Prices first surged a year ago after Americans increased their spending after vaccines were administered and Covid restrictions began to decline.

The sharp rise in demand caught many businesses unprepared and short on supplies, causing prices for goods such as cars, furniture and appliances to soar.

Data from the Labour Department released on Wednesday showed that inflation remains high in the US.

The consumer price index rose by 0.3 per cent in April compared to a month earlier, and 8.3 per cent compared this time last year.

Mr Powell was first nominated by former US president Donald Trump.

The Associated Press contributed to this report

Updated: May 12, 2022, 9:50 PM