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US Senate confirms Jerome Powell to second term as Fed chair amid inflation

Federal Reserve Chair Jerome Powell  (REUTERS)

The 80-19 vote reflected broad support in Congress for the Fed's drive to combat surging prices through a series of sharp interest rate hikes that could extend well into next year. The Fed's goal is to slow borrowing and spending enough to ease the inflation pressures.

The vote came amid inflation that has hit a 40-year high, fueled by the conflict in Ukraine and sanctions imposed on Russia, as well as Covid-19 restrictions in China that have raised concerns the global supply snarls may worsen.

The Fed chair has said his primary focus is on getting inflation under control, but acknowledged the effort could be painful.

Since February, when his first term expired, Powell had been leading the central bank in a temporary capacity.

He faces a difficult and risky task in trying to quell inflation without weakening the economy so much as to cause a recession. The job market remains robust and has strengthened to a point that Powell has said is “unsustainably hot" and contributing to an overheating economy.

Spiking prices across the economy have caused pain for millions of Americans whose wages aren’t keeping up with the cost of such necessities as food, gas and rent. And the prospect of steadily higher interest rates has unsettled the financial markets, with stock prices having tumbled for weeks.

Biden in a statement issued following Powell's confirmation said that he is pleased by the Senate's actions and that it will help move forward the administration's agenda to fight inflation.

The Federal Reserve plays a primary role in efforts to combat inflation and well-qualified board members like Powell will bring the knowledge needed to help the economy and families across the country, Biden added.