June 25, 2020

Warren Questions Fed Chair on Impact of its Policy Decisions on Racial Inequality

Questions follow Powell confirmation to Warren that the racial gaps in COVID-19 recovery are not a "not a healthy feature of our economy"

Questions for the Record (PDF) 

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) sent questions for the record (QFRs) to Chairman of the Federal Reserve Jerome Powell following up on their Senate Banking Committee hearing exchange about racial disparities in the COVID-19 economic recovery. During the hearing, Senator Warren noted that in the latest jobs numbers the white unemployment rate went down but the Black unemployment rate went up -- and stressed that this means the economy is not healthy. Chair Powell confirmed to Senator Warren that this was not a "healthy feature of our economy." 

"The minute jobs start recovering for white Americans, we can't just say the recovery is here," said Senator Warren. "The Fed and Congress need to take deliberate action to ensure we reverse the serious racial gaps in the current recovery -- and I'm asking Chair Powell to be specific about what the Fed can do to address this crisis within a crisis." 

In her QFRs, Senator Warren asked Chair Powell if the Fed currently considers the impact of its monetary policy decisions on racial inequality and if it considers whether the actions it takes with respect to payments, bank regulation, and the use of its emergency authorities under section 13(3) of the Federal Reserve Act affect different racial groups in different ways. 

Senator Warren also noted that following the Great Recession, white Americans recovered from the economic damage in a faster and more robust manner than Black and Hispanic households. She asked Chair Powell if he expects the same trends to occur with the current recession and what policy decisions the Fed and Congress can make to ensure that is not the case. 

Senator Warren's QFRs also include the safety and soundness of the financial system. She asked if all regulatory rollbacks made in response to the COVID-19 pandemic will be temporary and  how the Fed reconciles the fact that "significant uncertainty remains about the timing and strength of the recovery," when relaxing capital requirements and refusing to suspend bank dividend payouts. Read the rest of her QFRs here.