The Fed chair could face a grilling at his confirmation hearing. Here’s what to watch.

Jerome H. Powell, the Federal Reserve chair, will testify before lawmakers as he seeks Senate confirmation to a second term.

Jerome H. Powell, the Federal Reserve chair, will testify before members of the Senate Banking Committee on Tuesday as he seeks confirmation for a second term as head of the world’s most powerful central bank.

Mr. Powell, whom President Biden has nominated to a second four-year stint, could face tough questions from lawmakers at a complicated economic juncture and as an ethics scandal dogs the institution he leads.

Here’s what to watch.

Policy changes: They call it “inflationary pressure” for a reason. Mr. Powell is likely to face a volley of question from senators about why the Fed continued to stimulate the economy throughout the summer and fall even as prices rose sharply, why the central bank mistakenly presumed inflation would fade and what policymakers plan to do about it now.

The Fed is charged with maintaining price stability and fostering full employment, and officials have recently signaled that they could raise interest rates several times this year. Economists increasingly expect three or four increases, a forecast that could be shored up by an inflation report, slated for release on Wednesday, that is expected to show the fastest growth in consumer prices since June 1982.

Labor market. Mr. Powell is also likely to face questions about the job market, which is marked by swiftly falling unemployment, jumping wages and — paradoxically — millions of missing workers.

As the coronavirus keeps many former employees on the labor market’s sidelines because of health risks and caregiving duties, many industries face labor shortages. That has prompted Fed officials to say the economy is probably nearing full employment, setting the stage for higher interest rates that would aim to cool down the economy and keep it operating at a more even keel.

Trading scandal. A handful of Fed officials traded for their own portfolios just before and after the central bank swooped in to rescue a wide array of markets at the pandemic’s onset in 2020.

News of the trades broke in September, but they have stayed in the headlines and some officials have resigned over the issue. The Fed’s vice chair, Richard H. Clarida, announced on Monday that he was stepping down early. He didn’t give a reason, but he faces scrutiny over one of his 2020 transactions, the full extent of which was disclosed only when he corrected his financial filings in December. That makes him the third official to leave the central bank early since the news reports started, something out of the ordinary for the usually tame central bank.

His response. Mr. Powell released prepared remarks before the hearing, so we already have an early peek at what’s on his mind headed into the big day. “We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing and transportation,” Mr. Powell plans to tell lawmakers, explaining that he and his colleagues are dedicated to preventing high price gains from sticking around.

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