Tuesday’s 22-1 vote by the Senate Banking Committee clears the way for full Senate approval in the coming weeks before Yellen's term ends Feb. 3. The only “no” vote came from Sen. Elizabeth Warren (D-Mass.).
Powell, 64, who has served as a governor on the Fed board since 2012, is expected to continue Yellen’s policy of gradually raising the Fed’s key short-term interest rate but has signaled more openness to easing financial regulations.
At his confirmation hearing last week, Powell, a Republican, defended the Dodd-Frank law that tightened financial oversight after the 2008 financial crisis but supported loosening regulations on smaller banks.
“We want regulation to be the most intense, the most stringent for the very largest, most complex institutions,” he told senators. “And we want it to decrease in intensity and stringency as we move down through the regional banks and to the community banks.”
Sen. Michael D. Crapo (R-Idaho), the committee chairman, praised Powell’s judgment and expertise. But Warren said she was worried about Powell’s views on financial regulation.
“I’m very concerned that the Fed will systematically roll back post-crisis rules under Gov. Powell’s leadership, and that is a risk our financial system can’t afford,” she said.
Early in his tenure as Fed chief, Powell will likely be tested on interest rates. Stronger economic growth, which would be boosted by large tax cuts that Congress is poised to approve, would put more pressure on the central bank to more aggressively raise the benchmark interest rate to avoid high inflation.
Powell was tapped by President Trump in October after a lengthy search process.
He is not a controversial pick for Fed chair and should be confirmed easily by the full Senate, which has a Republican majority.
He has extensive Washington experience, including time as an assistant Treasury secretary under President George H.W. Bush. Before joining the Fed, Powell was a visiting scholar at the Bipartisan Policy Center think tank and a partner at the Carlyle Group, a high-powered Washington asset-management firm.
He was first nominated to the Fed by President Obama, and since joining the Fed board has never dissented on decisions by Yellen and the rest of the Fed’s monetary policymaking committee to raise the central bank’s interest rate very cautiously after the unprecedented stimulus policies used to fight the Great Recession.
In 2012, Powell was confirmed 74-21. All but one of the opposing votes came from Republicans amid concerns that Powell would be a rubber stamp for the stimulus policies of then-Fed Chairman Ben S. Bernanke. There also was a general opposition among some in the party to Obama nominees.