Evelyn Reynolds

The economy has begun to rebound from the coronavirus pandemic, but millions of people still haven’t returned to work. Some are looking but haven’t been able to find jobs. Others can’t work because of child care or other responsibilities. Still others say the pandemic led them to rethink how they prioritize their careers.What is keeping you on the sidelines right now? How are you getting by financially without a steady paycheck? How has your time away from work changed your life, both now and in the future?Tell us about your experience. More

Sen. Elizabeth Warren charged that Fed Chairman Jerome Powell has led an effort to weaken the nation’s banking system, and she will oppose his renomination.
In remarks made during a Senate hearing, the Massachusetts Democrat cited several instances where she said the Powell Fed has watered down post-financial crisis bank regulations.
Powell did not respond to Warren’s comment that she will oppose him.

Sen. Elizabeth Warren charged Tuesday that Federal Reserve Chairman Jerome Powell has led an effort to weaken the nation’s banking system, and she vowed to oppose his renomination.
In remarks made during a hearing before the Senate Banking Committee, the Massachusetts Democrat cited several instances where she said the Powell Fed has watered down post-financial crisis bank regulations.

Sen. Elizabeth Warren (D-MA) questions Treasury Secretary Janet Yellen and Federal Reserve Chairman Powell during a Senate Banking, Housing and Urban Affairs Committee hearing on the CARES Act, at the Hart Senate Office Building in Washington, DC, U.S., September 28, 2021.
Kevin Dietsch | Reuters

“Your record gives me grave concerns. 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,” Warren said.
Powell did not respond to Warren’s comment that she will oppose him.
Warren said deregulatory moves could cause another calamity the likes of which the U.S. saw during the 2008-09 breakdown of Wall Street institutions.
She called Powell “lucky” that banks thus far have been able to avoid major problems, citing the Archegos Capital Management collapse and the banking industry’s collective need for Fed assistance during the coronavirus pandemic as dangers to the system exacerbated by deregulatory moves.
“So far you’ve been lucky. But the 2008 crash shows what happens when the luck runs out,” she said. “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 served since 2018 and his term expires in February. Wall Street widely expects President Joe Biden to renominate Powell, though Warren and other more liberal senators are likely to provide some resistance.

Chair of the Federal Reserve Jerome Powell appears before a Senate Banking, Housing and Urban Affairs Committee hearing on the CARES Act, at the Hart Senate Office Building on September 28, 2021 in Washington, DC.
Matt McClain | AFP | Getty Images

Even if he does seek to give Powell another term, Biden will have a chance to remake the Fed.
Randal Quarles, the current vice chair in charge of supervision, will see his term expire in October, and current Fed Governor Lael Brainard, who favors a stronger regulatory hand, has been given frequent mention as a potential replacement.
Vice Chairman Richard Clarida will see his time on the Federal Reserve Board of Governors expire in January, and there remains another vacancy on the board.
Sen. Robert Menendez, D-N.J., grilled Powell during the hearing on the lack of diversity at the central bank. Biden will face pressure to provide a diverse set of nominees for the Fed vacancies.

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Fed Chairman Jerome Powell cautioned that the causes of the recent rise in inflation may last longer than anticipated.
The remarks are part of mandated testimony Powell must give to Congress regarding the Fed’s economic response to the Covid-19 pandemic.

Federal Reserve Chairman Jerome Powell, in remarks to be delivered Tuesday, cautioned Washington legislators that the causes of the recent rise in inflation may last longer than anticipated.
In a speech that he will deliver to the Senate Banking Committee, the central bank chair said economic growth has “continued to strengthen” but has been met with upward price pressures caused by supply chain bottlenecks and other factors.

“Inflation is elevated and will likely remain so in coming months before moderating,” Powell said. “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors. These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2 percent goal.”
The remarks are part of mandated testimony Powell must give to Congress regarding the Fed’s economic response to the Covid-19 pandemic. He will speak Thursday to the House Financial Services Committee.
Following its meeting last week, the Fed indicated it soon will start pulling back on some of the stimulus it has provided during the crisis. However, officials have stressed that the reduction of monthly asset purchases is not tantamount to looming interest rate hikes.
“We at the Fed will do all we can to support the economy for as long as it takes to complete the recovery,” Powell said.
Correction: Powell speaks Thursday to the House Financial Services Committee. An earlier version had the wrong day.

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America’s two top economic policymakers will warn lawmakers on Tuesday that the Delta variant of the coronavirus has slowed the economic recovery but will convey optimism about the economy’s overall trajectory, according to prepared remarks.Treasury Secretary Janet L. Yellen and the Federal Reserve chair, Jerome H. Powell, will testify before the Senate Banking Committee as the U.S. economy is at a crossroads, with businesses facing labor shortages and consumers coping with rising prices amid a resurgent pandemic. Congress is also grappling with a thicket of legislative challenges in the coming days, all of which could have an impact on the economy. They include extending federal funding to avoid a U.S. government shutdown, raising the debt limit to prevent defaulting on the nation’s financial obligations and passing President Biden’s infrastructure and social safety net packages.“While our economy continues to expand and recapture a substantial share of the jobs lost during 2020, significant challenges from the Delta variant continue to suppress the speed of the recovery and present substantial barriers to a vibrant economy,” Ms. Yellen will say, according to her prepared remarks. “Still, I remain optimistic about the medium-term trajectory of our economy, and I expect we will return to full employment next year.”The testimony will offer Ms. Yellen and Mr. Powell a chance to publicly press lawmakers to take action to raise or suspend the nation’s borrowing cap and to warn of the calamitous consequences if the United States defaulted on its obligations. Ms. Yellen has cautioned that debt-limit brinkmanship is eroding confidence in the United States and that a default, which could happen as soon as mid-October, would do irreparable harm to the economy.For weeks, Ms. Yellen has been quietly pressing lawmakers to put politics aside and ensure that the United States can continue to meet its fiscal obligations. She has been in touch with Wall Street chief executives and former Treasury secretaries as she looks to keep markets calm and find allies who can help her make the case to recalcitrant Republicans, who believe Democrats must deal with the debt limit on their own.“It is imperative that Congress swiftly addresses the debt limit,” Ms. Yellen will say. “The full faith and credit of the United States would be impaired, and our country would likely face a financial crisis and economic recession.”Mr. Powell is slated to tell senators that the Fed will continue to support the economy with its monetary policies, which influence how expensive it is to borrow and spend. But he will also make it clear that Fed officials will act if a recent jump higher in prices persists.“Inflation is elevated and will likely remain so in coming months before moderating,” Mr. Powell is prepared to say, based on remarks released Monday afternoon.He will cite the lingering coronavirus pandemic as a risk to the economic outlook, according to his prepared statement.Mr. Powell has also fretted about the debt limit in recent weeks, saying during a news conference last week that default is “just not something that we should contemplate,” and that “no one should assume that the Fed or anyone else can protect the markets or the economy in the event of a failure, fully protect in the event of a failure to make sure that we do pay those debts when they’re due.”Ms. Yellen and Mr. Powell will testify again on Thursday before the House Financial Services Committee. More

Robert S. Kaplan will exit his role as head of the Federal Reserve Bank of Dallas next month. Eric S. Rosengren, the head of the Federal Reserve Bank of Boston, is also retiring earlier than planned.Eric S. RosengrenSteven Senne/Associated PressRobert S. KaplanAnn Saphir/ReutersTwo Federal Reserve officials embroiled in controversy for trading securities that could have benefited from the central bank’s 2020 intervention in financial markets announced on Monday that they would leave their positions.Robert S. Kaplan, who heads the Federal Reserve Bank of Dallas, will retire on Oct. 8, according to a statement released Monday afternoon. Mr. Kaplan’s statement acknowledged the controversy as the reason for his departure. Eric S. Rosengren, the president of the Boston Fed, will retire this Thursday, accelerating his planned retirement by nine months. Mr. Rosengren cited health reasons for his early departure.The resignations followed the Fed’s announcement this month that Chair Jerome H. Powell had ordered a review of the central bank’s ethics rules in light of the concern surrounding the trades. When asked about his confidence in Mr. Kaplan and Mr. Rosengren during a news conference last week, Mr. Powell expressed displeasure with what had happened.“No one on the F.O.M.C. is happy to be in this situation, to be having these questions raised,” Mr. Powell said, referring to the policy-setting Federal Open Market Committee. He added, “This is an important moment for the Fed and I’m determined that we will rise to the moment.”Mr. Kaplan noted in his statement that it was his decision to leave the Fed, and that “the recent focus on my financial disclosure risks becoming a distraction” to the central bank’s economic work.Mr. Kaplan drew scrutiny for buying and selling millions of dollars in individual stocks, among other investments, last year — trading first reported on by The Wall Street Journal on Sept. 7. He has maintained that his trades were consistent with Fed ethics rules.Mr. Rosengren announced on Monday morning that he was retiring earlier than planned to try to prevent a kidney condition from worsening, in the hopes of staving off dialysis. The Boston Fed president came under criticism because he held stakes in real estate investment trusts, which invest in and sometimes manage properties, and listed purchases and sales in those in 2020. He spent last year warning publicly about risks in the commercial real estate market, and was helping to set Fed policy on mortgage-backed security purchases, which can help the housing market by improving financing conditions.Both presidents had previously announced that they would convert their financial holdings into broad-based indexes and cash by Sept. 30.Mr. Powell offered statements of support for both of the retiring officials in the news releases announcing their exit.But the controversy has pushed him into a delicate position. His own term as Fed chair expires early next year, and the White House is actively considering whether to reappoint him. A scandal at his central bank is sure to draw questions from senators when he testifies this week, and could even hurt his reappointment chances.As chair, Mr. Powell has also focused on shoring up public support in the central bank and explaining its role. He holds frequent news conferences, aims to speak in simpler language, and championed a series of “Fed Listens” events where top central bank officials meet and hear from community members whom they might not otherwise interact with — from community college students to local food pantry staff.The 2020 trading disclosures, which are shaping up to be the most headline-grabbing scandal the central bank has faced in years, risk chipping away at the widespread trust he has been working to build.Responses to Mr. Kaplan and Mr. Rosengren’s trading disclosures have been swift, and scathing. The group Better Markets had been calling for the Fed to fire both presidents if they did not resign. Other progressive groups had called for at least one of them to be ousted, and ethics watchdogs have said that the rules that had enabled their trades needed to be revisited.After the resignation announcements on Monday, Wall Street promptly began to assess what the departures would mean for monetary policy. Both officials have tended to worry about financial stability, and for that reason were likely to favor removing monetary policy support sooner than some of their colleagues — a stance often referred to as being hawkish.“Their exit will take out two of the nine more hawkish Fed officials who saw a 2022 rate hike as of the September F.O.M.C. meeting last week and remove important voices on financial stability issues in particular,” Krishna Guha at Evercore ISI wrote in a note to clients shortly after the announcement.Mr. Rosengren has been president of the Boston Fed since 2007, and his retirement was previously planned for June. The Fed’s 12 regional members rotate in and out of voting seats, and Mr. Rosengren would have had a vote on monetary policy next year. Mr. Kaplan would have voted in 2023.Kenneth C. Montgomery, the Boston Fed’s first vice president, will serve as interim president at that bank. The Boston Fed’s board members — excluding bank representatives — will need to select a permanent pick for president, subject to approval from the Fed’s Board of Governors in Washington.A longtime Fed employee who worked in research and bank supervision before becoming president, Mr. Rosengren played a key role in the 2020 crisis response. His regional Fed ran both the money market mutual fund and Main Street lending backstop programs that the Fed rolled out last year.The Boston Fed noted in the release that Mr. Rosengren hoped that his health condition would improve, and that he would be able to “explore areas of professional interest” in the future.Mr. Kaplan has been at the head of the Dallas Fed since late 2015, before which he taught at Harvard University and had a long career at Goldman Sachs. Meredith Black, that bank’s first vice president who had planned to retire, will serve as interim president until a successor is named, the Dallas Fed said. More

Dallas Fed President Robert Kaplan said Monday he is stepping down from his position following a controversy over his stock holdings.
Boston Fed President Eric Rosengren, who had come under similar scrutiny, announced earlier in the day that he was retiring.

Dallas Federal Reserve President Robert Kaplan became the second regional central bank leader to resign Monday, saying he was stepping down early following a recent controversy over stock market trades he made.
Kaplan’s early retirement follows an announcement earlier in the day from Boston Fed President Eric Rosengren, who said he will leave as well but cited health concerns and not the issue over his investment portfolio activity.

“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy. Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work,” Kaplan said in a statement.
His retirement takes effect Oct. 8. The resignations come a day before Fed Chair Jerome Powell is to spend two days on Capitol Hill updating legislators on the central bank’s efforts to combat the economic impact of the Covid-19 pandemic.
Controversy had swirled over the issue after disclosures that Kaplan in particular had been executing large-dollar trades in big-name companies such as Amazon, Apple and Delta Air Lines. The Wall Street Journal first reported the trades.
Subsequent to the disclosures, both Kaplan and Rosengren said they would be selling their stocks to avoid the appearance of conflict. Questions were raised because the Fed has conducted trillions of dollars in asset purchases aimed at helping markets function, and has bought corporate bonds from mega-cap companies including Apple.
Kaplan insisted he had done nothing wrong.

“During my tenure, I have adhered to all Federal Reserve ethical standards and policies,” he said in his monthly statement. “My securities investing activities and disclosures met Bank compliance rules and standards.”
Still, the issue has reverberated through the Fed, with officials pledging to tighten rules so that such potential conflicts don’t happen again.
“We need to make changes, and we’re going to do that as a consequence of this,” Powell said last week. “This will be a thorough going and comprehensive review. We’re going to gather all the facts and look at ways to further tighten our rules and standards.”
Powell vowed that changes would be made.
“I want to be able to look back on this years from now and know that we rose to meet this challenge and handled the situation well and that what we did made a lot of sense and protected the public’s interest and the institution that we’re all a part of,” he said.
Powell on Monday wished Kaplan well and praised his work at the Dallas Fed.
“He has been a passionate and forceful public voice on a wide range of issues, including the critical value of early childhood education and literacy,” the chairman said in a statement.
Meredith Black, the first vice president at the Dallas Fed who herself was planning on retiring, will serve as interim head for the district until a permanent successor is chosen.
This is breaking news. Please check back for updates.

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Top Federal Reserve officials emphasized on Monday that the labor market was far from completely healed, underlining that the central bank will need to see considerably more progress before it will feel ready to raise interest rates.“We still have a long way to go until we achieve the Federal Reserve’s maximum employment goal,” John C. Williams, the president of the Federal Reserve Bank of New York, said in a speech Monday afternoon.Leading Fed officials — including Mr. Williams, Lael Brainard and Jerome H. Powell, the Fed chair — have given similar assessments of the outlook in recent days and weeks. They have pointed out that the economy is swiftly healing, bringing back jobs and normal business activity, and that existing disruptions to supply chains and hiring issues will not last forever.But they say that the recovery is incomplete and that it’s worth being modest about the path ahead, especially as the Delta variant demonstrates the coronavirus’s ability to disrupt progress.“Delta highlights the importance of being attentive to economic outcomes and not getting too attached to an outlook that may get buffeted by evolving virus conditions,” Ms. Brainard, a Fed governor, said on Monday.Those comments came on the heels of the Fed’s September meeting, at which the central bank’s policy-setting committee clearly signaled that officials could begin to pare back their vast asset-purchase program as soon as November. They have been buying $120 billion in government and government-backed securities each month.The speeches on Monday emphasized that as officials prepare to make that first step away from full-fledged economic support, they are trying to separate the decision from the Fed’s path for its main policy interest rate, which is set to zero.Central bankers have said they want to see the economy return to full employment and inflation on track to average 2 percent over time before lifting rates away from rock bottom.That makes the debate over the labor market’s potential a critical part of the Fed’s policy discussion.Some regional Fed presidents, including James Bullard at the Federal Reserve Bank of St. Louis and Robert S. Kaplan at the Federal Reserve Bank of Dallas, have suggested that the labor market may be tighter than it appears, citing data including job openings and retirements.But Mr. Williams said on Monday that the job market still had substantial room to improve. While the unemployment rate has fallen from its pandemic high, he said the Fed was looking at more than just that number, which tracks only people who are actively looking for work. The Fed also wants the employment rate to rebound. He pointed out that a high level of job openings is not a clear signal that the job market has healed.“Even if job postings are at a record high, job postings are not jobs,” Mr. Williams said. “These vacancies won’t be filled instantly.”Although Mr. Williams said he had been watching the impact of school reopenings on the labor market, he said he did not think they would cause a huge surge in people returning to work this month or in October.“It may take quite a bit longer for the labor supply to come fully back,” he said.Ms. Brainard batted back the idea that labor force participation — the share of adults who are working or looking for jobs — might not return to its prepandemic level.“The assertion that labor force participation has moved permanently lower as a result of a downturn is not new,” she said. A similar debate played out following the 2008 financial crisis and labor force participation ultimately rebounded, especially for people in their prime working years.Ms. Brainard warned that Delta was slowing job market progress. Last week there were more than 2,000 virus-tied school closures across nearly 470 school districts, she said, and “the possibility of further unpredictable disruptions could cause some parents to delay their plans to return to the labor force.” More