Daily Times

Jerome Powell, chairman of the Federal Reserve, has always shown his policies to be an independent array of steps, quite similar to the policies of the Treasury. During the Covid-19 pandemic, he made clear that interest rates would be controlled, and would continue to be so until the crisis would overturn.

The upper class has always built pillows of deceit by taking advantage of the blue-collar workforce, for something to fall on when their corporations flop. They even go so far as describing themselves as businesses, as if they were some poor start-ups with no power at all. Well, poor them, because 600 billion dollars a year is not enough to make ends meet.

The Trump-appointed Fed Chair has been in office for quite some time, and the option to replace him was avoided earlier this year, after Joe Biden was elected, and decided against it. Following the Covid-19, he led the road to recovery for the part of interest regulations. He slashed the target for the federal funds rate, to 0-0.25 per cent. This would help home rentals revive from the estate sector’s recession. The reserve further decided to purchase large amounts of securities, a 2009-era tool used to buy back millions of dollars, and resume market functionality.

These steps were no doubt helpful, but the seizure of some of these measures, including blocking the Congress-approved $454 billion to stop lending and buying bonds on December 31. This would have helped limit the Biden Administration’s financial opportunities, for the term starting in the following January. This raised eyebrows from Democrats, who saw this as a roadblock in a big road.

And while the Treasury’s processes are indifferent to the reserve’s new policies and warnings, Secretary of the Treasury, Janet Yellen, has made clear that the crisis is not over. In a recent Senate Banking, Housing and Urban Affairs Committee on Tuesday, she outlined the importance of American debt ceilings alongside Chairman Jerome Powell.

Clearly, 600 billion dollars a year is not enough to make ends meet.

Such an on-and-off appointment of default is extremely dangerous for markets on the brink of a social and economic collapse. She charted that, “This would be a manufactured crisis we have imposed on this country.” She went on to say, “It would be a self-inflicted wound of enormous proportions.”

Backing up her beliefs, she clearly stated that the government will run out of money to pay its bills by October 18. All this, amidst a looming government shut-down. The idea of delaying a $1 trillion infrastructure bill ahead of a critical vote, is what is making it a threat to shut down the government by midnight, Friday.

Now, as the time for re-nomination looms, prominent treasury voices, like Yellen herself have voiced their support for his instalment, but Progressives see this as another opportunity for sabotage of the Reserve. Senator Elizabeth Warren, of Massachusetts, has made clear that she will not support the potential for nomination. She, along with others in the House, believe that he has helped over-shadow the banking committee’s steps to investigate Banks and markets, and their useful functioning in America’s economy.

“Your record gives me grave concern. Over and over you have acted to make our banking system less safe. And that makes you a dangerous man to head up the Fed,” Warren said during Tuesday’s Senate Banking Committee hearing.

Former banking regulator Sheila Bair has also echoed her opposition as unnecessary regulatory laziness would ease the federal governments’ grip on the Banking community.

Since the Covid-19 Pandemic has begun, the world is facing a financial crisis, worse than the 2008 financial crisis. Unemployment numbers are climbing, the poor are growing poorer, more and more people are going into Poverty, and most governments don`t have the money to send out stimulus checks like the United States. Though, it too is facing its own problems.

The writer is a freelance columnist.