Signs of a Rift at the Federal Reserve; All Eyes on Ohio Tonight
Author: Greg Valliere
August 3, 2021
IT’S NOT AN ALL-OUT BRAWL, like the Democrats’ fight between progressives and the establishment, but there are signs of some dissent at the Federal Reserve, centering on Chairman Jerome Powell’s alleged reluctance to use his regulatory powers.
BLOOMBERG NEWS REPORTED YESTERDAY that Fed Gov. Lael Brainard took questions after a recent speech and indicated frustration with Powell. Brainard said she’s more inclined than Powell to use regulatory tools to head off financial excesses like asset bubbles.
BRAINARD AGREES WITH POWELL that the Fed needs to see more improvement in the job market (which could come on Friday) before moving toward a tapering of asset purchases. But she and progressives seem to believe that Powell has not been sufficiently aggressive in regulating big banks.
POWELL IS A REPUBLICAN, BRAINARD IS A DEMOCRAT: With President Biden under fire from the left, Powell’s nomination isn’t certain. Brainard is the obvious alternative, and her willingness to go public with criticism of Powell has suddenly made this an interesting race.
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ALL EYES ON OHIO: Two important primaries today. While not as exciting as the epic men’s 400 hurdles race this morning in Tokyo, these primaries will offer important clues on the direction of both parties heading into next year’s mid-term elections.
THE DEMOCRATS SUDDENLY ARE FACING A REVOLT from the left, as we wrote yesterday. In a primary near Cleveland, progressives are backing Nina Turner, who has been endorsed by Bernie Sanders and the left. Her opponent is Shontel Brown, who has the endorsement of establishment figures like Hillary Clinton. A win by Turner would complicate life for Joe Biden, who faces an insurgent left wing.
THE REPUBLICAN RACE, in a district near Columbus, will be important for Donald Trump, who endorsed a candidate who lost in a Texas primary last month. Trump is backing an energy lobbyist, Mike Carey, who is running against 10 other GOP candidates, many with endorsements from well-known Ohio conservatives. Trump will resume rallies later this month — beginning with his base in Alabama.
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GLASS HALF FULL ON COVID: Cases of the delta variant may not peak for several more weeks, but we’ll take the optimistic argument: vaccinations are soaring; 70% of all Americans now have had at least one shot. Herd immunity is coming.
IN THE MEANTIME, speculation will persist about Senators who were with Lindsey Graham, who was a guest on Joe Manchin’s boat this weekend on the Potomac River. Graham said yesterday that he has a breakthrough infection, and other lawmakers on the boat apparently did not wear masks.
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