“Cut your wrists and go to hell”. Or: "I wish you would fall down the stairs and die". Thus, according to the New York Times, the Republican deputies, 13 in all, who made it possible to approve the infrastructure plan promoted by President Biden were greeted by their colleagues. Steve Bannon, the pasdaran of the radical right alongside Donald Trump, has published on his website the telephone numbers of the "traitors", those whom the former president defines as Rino (Republicans in name only).
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In short, let's not complain about the periodic brawls in Montecitorio. This is the political climate that reigns in Washington where, by now, it is very difficult to share bipartisan decisions, especially when we touch politically very sensitive times, such as the appointment of the governor of the Fed, a choice that President Joe Biden could make by the end of the week or, at the latest, at the beginning of next to leave time for senators and deputies to promote (or reject) the candidate chosen by the president for the next four years starting next February.
La political brawl, rather than interest rate concerns, risks playing a bad joke on Jerome Powell, the Republican chosen by Trump in 2017. Taking advantage of the scandal caused by the stock market purchases of the governors of the Boston and Dallas Fed, the influential Senator Elisabeth Warren portrayed Powell as "an evil genius" investigating the sales of shares in Vanguard funds for a million dollars made by Powell in 2020. But the accusations proved weak: Powell, who spoke of "personal needs", sold the shares at lows, before the November 2019 discovery of vaccines helped the recovery of Wall Street.
But Powell's acquittal, combined with the positive opinion by Janet Yellen, the inspirer of the economic policy of the White House who had preceded him at the helm of the central bank, may not be enough to guarantee his confirmation, despite the independence demonstrated under Trump's broadsides, at the time very critical of the Fed's monetary policy choices. The left wing of the Democrats, in fact, is pressing for the appointment of Lael Brainard, 59 years old, master's degree from Harvard, formerly brilliant US Treasury undersecretary with Barack Obama who opened the doors of the Fed to him in 2014, where the blonde Lael has played the role of the opposition in recent years, voting against any easing of legislation on the system banking and, in recent years, in favor of an active role of the central bank on the issue of the environment.
The duel, therefore, runs between the favorite Powell (or bookmakers give it to 70 percent) and the challenger Brainard, supported by the patrol of the democratic left. It won't be easy for Biden propose Powell's confirmation, a bipartisan solution that part of the Democrats see as smoke screens. But it will be even more difficult to scrape together the handful of votes needed by Republicans to avoid the risk of a rejection for the combative Brainard. But on closer inspection, Biden will not be forced to make a dry choice. At the end of the year, in fact, the mandate of one of Powell's deputies, the Republican Randall Quarles, powerful supervisor of the banks, expires. Not only. The other deputy, the esteemed Republican Richard Clarida, who is in fact responsible for the interest rate strategy, will also soon leave the central bank. From here the possible squaring of the circle: while confirming Powell in the presidency, Biden can guarantee the Democrats a majority of the Fed on paper on the eve of years that promise to be complicated, given that rates, close to zero, will only rise in the face of inflation which, for "temporary" whatever it is, it has now returned to the levels of the early XNUMXs.
In the face of continued Wall Street records, symbol of an era that will be remembered as the second golden age for the wealthy, taking advantage of cheap money that fostered the formation of inflation-proof financial bubbles, from the art market to cryptocurrencies, not to mention brick run. Of course, the boom in the financial markets has favored the recovery of employment, but at the price of equality, given the wage imbalances which by themselves no longer guarantee an at least acceptable standard of living. So in the next few years easy money policy it will no longer be sufficient to evaluate the Fed's action. Environment and energy in addition to rules for fintech they will make a difference.
