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Fed’s Powell Presents Lawmakers With a Charm Offensive

WASHINGTON—Five months into his term as Federal Reserve chairman,

Jerome Powell

is investing considerable time and energy on Capitol Hill.

Mr. Powell, who heads to Congress on Tuesday to begin two days of testimony on the economy, has met individually with 18 lawmakers—10 Republicans and eight Democrats—during his first four months as chairman, according to his public calendars. He also had eight calls with lawmakers, equally split between Republicans and Democrats.

By contrast, former Fed Chairwoman

Janet Yellen

met with just three lawmakers—two Democrats and one Republican—during her first four months as the central bank’s leader. She spoke with four Democrats by phone.

“As far as meeting with Congress is concerned, I’m going to wear the carpets of Capitol Hill out by walking those halls and meeting with members,” Mr. Powell said in a radio interview last week. “I feel like that’s a really important thing that the chair can do.”

Mr. Powell’s background is different from his recent predecessors, Ms. Yellen and

Ben Bernanke,

both Ph.D. economists who spent much of their careers in academia.

Mr. Powell, a Washington native who has a law degree and worked in finance, testified frequently before congressional banking committees in the early 1990s, when he served as a Treasury official in the George H.W. Bush administration.

He was nominated twice to the Fed’s board of governors by President

Barack Obama,

before President

Donald Trump

tapped him last year to succeed Ms. Yellen. Mr. Powell won Senate confirmation in January with 84 votes, the most for any Fed chief since the 2008 financial crisis.

“I’m not sure how many people you can name in this town” that have been nominated by both Messrs. Obama and Trump, said St. Louis Fed President

James Bullard

in an interview last month. He said Mr. Powell’s bipartisan political relationships will be an asset for the Fed.

Rep. Emanuel Cleaver (D., Mo.), who met Mr. Powell in his office, said, “He’s done a fabulous job in reaching out to members on both sides of the aisle to make sure that they understand that he is not one of these highfalutin governors who are going to resent having to spend time with members of Congress who are struggling with arithmetic.”

Mr. Cleaver, a member of the Congressional Black Caucus, said they had a “good, old-fashioned” introductory conversation and discussed inclusion and employment challenges facing African-Americans. “I feel good about him, and I think he’s the kind of person you can converse with,” he said.

Some lawmakers say they see an opportunity for a reset in relations between the Fed and Congress after a period of increased tension following the financial crisis, which dented the central bank’s aura of expertise.

“We should be working together and not against each other,” said Rep. Blaine Luetkemeyer (R., Mo.), who met with Mr. Powell in March.

Mr. Luetkemeyer said he expects more lawmakers will relate to Mr. Powell than to past Fed chiefs: “He’s not a think-tank guy, but a banker from the real world, and that gives him a perspective that I think is important.”

Rep. Gwen Moore (D., Wis.) said Mr. Powell was careful, even in private, not to opine on policy matters beyond the Fed’s scope, such as the recent tax cuts. It was “very difficult to get him outside of his wheelhouse,” said Ms. Moore, who met with the Fed chief in March.

Mr. Powell could face sharp questioning Tuesday from Senate Democrats who opposed steps the Fed has taken to relax certain financial regulations. In a letter last week, Sens. Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts pressed Mr. Powell for details about the unusual treatment of Goldman Sachs Group Inc. and Morgan Stanley in recently conducted stress tests.

Friction between elected officials and central banks isn’t unusual. Tensions dissipated under

Alan Greenspan,

who enjoyed unusual deference from lawmakers as the economy boomed during the late 1990s.

The Fed drew increased scrutiny and criticism from Congress during and after the crisis, as lawmakers questioned Fed-assisted bailouts of big financial institutions and the central bank’s extraordinary measures to support the economy. Congress also grown more politically polarized in recent years.

Some Democrats accused the Fed of being too cozy with banks. Some Republicans objected to the central bank’s aggressive steps to lower borrowing costs, in part because they lowered the cost of federal budget deficits incurred under Mr. Obama. Others opposed the Fed’s role in enacting new financial regulations under the 2010 Dodd-Frank Act.

Rep. Bill Huizenga (R., Mich.) said he has seen an evolution in the Fed’s approach to lawmakers since he arrived in Congress in 2011. At first, the Fed was “far more veiled” in its interactions on Capitol Hill, he said.

That started changing during Ms. Yellen’s time as chairwoman, he said. She started doing a better job cultivating relationships as her term went on, Mr. Huizenga said.

“Powell has not only continued that, I think he’s tried to increase that outreach,” said Mr. Huizenga, who met with Mr. Powell in April.

“Somebody there figured out they had not only a policy problem but a P.R. problem and neither of those is good,” Mr. Huizenga said. “They’ve gotten smarter about how they’ve been approaching that.”

Corrections & Amplifications
Jerome Powell met with 18 lawmakers during his first four months as Federal Reserve chairman. An earlier version of this article incorrectly said he met with 17 lawmakers. He also had eight calls with lawmakers, equally split between Republicans and Democrats. An earlier version of this article incorrectly said it was 10 calls. (July 16, 2018)

Write to Nick Timiraos at [email protected] and David Harrison at [email protected]

Source : WSJ

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