By Nick Timiraos and David Harrison
WASHINGTON -- Five months into his term as Federal Reserve
chairman, Jerome Powell is investing considerable time and energy
on Capitol Hill.
Mr. Powell, who heads to Congress on Tuesday to begin two days
of testimony on the economy, has met individually with 17 lawmakers
-- nine Republicans and eight Democrats -- during his first four
months as chairman, according to his public calendars. He also had
10 calls with lawmakers, equally split between Republicans and
Democrats.
By contrast, former Fed Chairwoman Janet Yellen met with just
three lawmakers -- two Democrats and one Republican -- during her
first four months as the central bank's leader. She spoke with four
Democrats by phone.
"As far as meeting with Congress is concerned, I'm going to wear
the carpets of Capitol Hill out by walking those halls and meeting
with members," Mr. Powell said in a radio interview last week. "I
feel like that's a really important thing that the chair can
do."
Mr. Powell's background is different from his recent
predecessors, Ms. Yellen and Ben Bernanke, both Ph.D. economists
who spent much of their careers in academia.
Mr. Powell, a Washington native who has a law degree and worked
in finance, testified frequently before congressional banking
committees in the early 1990s, when he served as a Treasury
official in the George H.W. Bush administration.
He was nominated twice to the Fed's board of governors by
President Barack Obama, before President Donald Trump tapped him
last year to succeed Ms. Yellen. Mr. Powell won Senate confirmation
in January with 84 votes, the most for any Fed chief since the 2008
financial crisis.
"I'm not sure how many people you can name in this town" that
have been nominated by both Messrs. Obama and Trump, said St. Louis
Fed President James Bullard in an interview last month. He said Mr.
Powell's bipartisan political relationships will be an asset for
the Fed.
Rep. Emanuel Cleaver (D., Mo.), who met Mr. Powell in his
office, said, "He's done a fabulous job in reaching out to members
on both sides of the aisle to make sure that they understand that
he is not one of these highfalutin governors who are going to
resent having to spend time with members of Congress who are
struggling with arithmetic."
Mr. Cleaver, a member of the Congressional Black Caucus, said
they had a "good, old-fashioned" introductory conversation and
discussed inclusion and employment challenges facing
African-Americans. "I feel good about him, and I think he's the
kind of person you can converse with," he said.
Some lawmakers say they see an opportunity for a reset in
relations between the Fed and Congress after a period of increased
tension following the financial crisis, which dented the central
bank's aura of expertise.
"We should be working together and not against each other," said
Rep. Blaine Luetkemeyer (R., Mo.), who met with Mr. Powell in
March.
Mr. Luetkemeyer said he expects more lawmakers will relate to
Mr. Powell than to past Fed chiefs: "He's not a think-tank guy, but
a banker from the real world, and that gives him a perspective that
I think is important."
Rep. Gwen Moore (D., Wis.) said Mr. Powell was careful, even in
private, not to opine on policy matters beyond the Fed's scope,
such as the recent tax cuts. It was "very difficult to get him
outside of his wheelhouse," said Ms. Moore, who met with the Fed
chief in March.
Mr. Powell could face sharp questioning Tuesday from Senate
Democrats who opposed steps the Fed has taken to relax certain
financial regulations. In a letter last week, Sens. Sherrod Brown
of Ohio and Elizabeth Warren of Massachusetts pressed Mr. Powell
for details about the unusual treatment of Goldman Sachs Group Inc.
and Morgan Stanley in recently conducted stress tests.
Friction between elected officials and central banks isn't
unusual. Tensions dissipated under Alan Greenspan, who enjoyed
unusual deference from lawmakers as the economy boomed during the
late 1990s.
The Fed drew increased scrutiny and criticism from Congress
during and after the crisis, as lawmakers questioned Fed-assisted
bailouts of big financial institutions and the central bank's
extraordinary measures to support the economy. Congress also grown
more politically polarized in recent years.
Some Democrats accused the Fed of being too cozy with banks.
Some Republicans objected to the central bank's aggressive steps to
lower borrowing costs, in part because they lowered the cost of
federal budget deficits incurred under Mr. Obama. Others opposed
the Fed's role in enacting new financial regulations under the 2010
Dodd-Frank Act.
Rep. Bill Huizenga (R., Mich.) said he has seen an evolution in
the Fed's approach to lawmakers since he arrived in Congress in
2011. At first, Fed was "far more veiled" in its interactions on
Capitol Hill, he said.
That started changing during Ms. Yellen's time as chairwoman, he
said. She started doing a better job cultivating relationships as
her term went on, Mr. Huizenga said.
"Powell has not only continued that, I think he's tried to
increase that outreach," said Mr. Huizenga, who met with Mr. Powell
in April.
"Somebody there figured out they had not only a policy problem
but a P.R. problem and neither of those is good," Mr. Huizenga
said. "They've gotten smarter about how they've been approaching
that."
Write to Nick Timiraos at nick.timiraos@wsj.com and David
Harrison at david.harrison@wsj.com
(END) Dow Jones Newswires
July 16, 2018 13:29 ET (17:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.