Inside the Push to Remake “the Fed”

OFF-KILTER with Rebecca Vallas

The Federal Reserve, better known as “the Fed,” has been in the spotlight quite a bit in recent weeks, following an apparent insider trading scandal embroiling several high-level officials at America’s central bank. And in the latest shoe to drop, disclosure documents made public in recent weeks reveal that the scandal of stock trading during the pandemic extends all the way up to the chair of the Fed himself—Jerome “Jay” Powell.

With Chairman Powell’s term ending in January 2022, a growing chorus of progressives, climate activists, advocates for racial justice, and economic heavyweights from Nobel Prize–winning economist Joseph Stiglitz to Massachusetts Senator Elizabeth Warren are calling on President Biden not to renominate Powell and instead to use what could be as many as four open seats on the Fed’s all-white, seven-member governing board to reshape the agency into an institutional force for racial, gender, climate, and economic progress—and bring some long-overdue racial and gender diversity to a critical institution that’s been run nearly exclusively by white men.

“Is the Biden administration going to fulfill what is at the heart of its agenda? Then it should not be Powell,” said Stiglitz in an interview with Reuters last month. The Biden White House has not yet announced what they plan to do when Powell’s term ends, though a decision is expected any day now.

With an historic debate brewing over what to do with the Federal Reserve, we at Off-Kilter thought it would be useful to pull together something of an explainer on the nation’s central bank, how it operates, and why it’s so important to economic and antipoverty policy—and to go inside the push to remake the Fed in the wake of the wave of recent scandals. So Rebecca sat down with Saqib Bhatti, co-executive director of the Action Center on Race and the Economy, better known as ACRE—and one of the groups leading the charge—to break it all down.

For lots more on this:

• Read more from Saqib and his ACRE colleagues Brittany Alston and Vasudha Desikan in “President Biden Must Appoint a New Fed Chair Who Is Serious About Racial Equity.”
• Read Vasudha Desikan and Liberation in a Generation’s Solana Rice in Ms. Magazine: “We Need More Women in Leadership at the Fed: Personnel Is Policy.”
• Here’s more on the pandemic stock trading scandals, from The American Prospect’s Bob Kuttner.
• Here’s why Nobel economist Joseph Stiglitz says Powell should go.
• And here’s Senator Elizabeth Warren’s speech making the case for new leadership at the Fed.