Powell officially sworn in as Fed chair

Federal Reserve Chair Jerome Powell was formally sworn in on Monday to begin his second four-year term as head of the U.S. central bank as it aims to tame the highest inflation in four decades without tipping the economy into recession. Lael Brainard was also sworn in as the Fed’s new vice chair, and the two newest members of the Fed’s Board of Governors, Philip Jefferson and Lisa Cook, who are both Black economists, the Fed said in a statement.

The US Senate voted on May 12 to confirm Powell to the post with bipartisan backing. Powell has served on the Fed’s Board of Governors since 2012. Cook is the first Black woman to serve on the Fed’s board.

The swearing in means six of the seven seats on the Fed’s board are filled just weeks before the central bank’s June 14-15 policy meeting, at which it is expected to raise its benchmark overnight lending rate by half a percentage point as it battles inflation.

Jefferson was most recently dean of faculty at Davidson College, and has written extensively about poverty. Cook was an economics professor at Michigan State University where her research focused on the economic impact of gender and racial inequality.

Powell promised to keep pushing on rate hikes until there is clear and convincing evidence that inflation is dropping. Traders of futures tied to the Fed’s policy rate are betting that means that the overnight lending rate between banks – currently in the 0.75%-1% range – will rise to 2.75%-3% by the end of the year, high enough to start putting the brakes on economic growth.