Jerome Powell's critics slam his regulatory approach to the 2008 financial crisis, with figures like Sheila Bair voicing concerns over Powell's perceived weak regulations. Bair, who led the Federal Deposit Insurance Corporation (FDIC) back then, has taken issue with the Bank's achievements during Trump's reign, arguing that they have loosened constraints repeatedly. She also criticizes Powell's handling of financial regulations, particularly the relaxation of stress test assumptions, changes to the Volcker Rule, and the elimination of margin requirements for derivative transactions.
In defense of Jerome Powell, Anthony Scaramucci, a partner in investment firm SkyBridge Capital, has spoken of Powell's strong performance as the Federal Reserve Chair, stating he has done "good work." While acknowledging critics keen on replacing Powell due to his optics, Scaramucci believes it would be a mistake to indulge in this change. The Federal Reserve, for its part, has declined to comment on Bair's criticisms.
Powell's tenure has not been entirely without controversy, as other figures, like Elizabeth Warren and Rick Scott, have taken issue with his handling of ethics issues. In contrast, Powell's defenders take note of the Fed's success in bringing down inflation from a peak of 7.2% in June 2022, thanks to the "soft landing" of the economy, despite forecasts of a recession due to rate hikes. Jerome Powell has also assured the public that their bank accounts are safe.
Sheila Bair, known for advocating robust regulation to prevent future financial crises, might criticize Jerome Powell's policies for not adequately addressing systemic risks or implementing sufficiently stringent regulations to prevent crises similar to 2008.
