Treasury Hiding Records That Could Reveal True Basis for Fed Reserve Nomination

FGI files transparency suit seeking records regarding renomination of Jerome Powell

July 27, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Department of the Treasury seeking records on the Administration’s decision to renominate Jerome Powell as Chair of the Federal Reserve during a time of record-high inflation.

In November 2021, President Biden nominated Jerome Powell for a second term as chair of the Federal Reserve. Leading up to and during his renomination process, Powell had overseen monetary policy as inflation hit levels not seen for forty years. Given the state of the nation’s economy, Powell’s renomination had received criticism and pushback from elected officials on both sides of the aisle.

FGI’s initial concern was based on public reports that the renomination of Chairman Powell was not based on his record, his willingness to address skyrocketing inflation, or the independent agency’s statutory mission. Rather, the decision may have been due to his prioritizing a special interest agenda that is at least partially responsible for driving gas prices to all-time highs. The request from FGI is intended to uncover those motivations.

Though outside of the Federal Reserve’s mission, mitigating or inserting speculative climate risk analysis into U.S. monetary policy may have been a driving factor in Powell’s renomination. If true, this would represent a substantial departure from long-established norms of Federal Reserve independence upheld by both major political parties. Inserting such policy goals would no longer insulate the powerful independent agency from blowing political winds that could distract from its statutory mandate.

Peter McGinnis, spokesman for FGI, issued the following statement:

“Jerome Powell was given a second chance by the Biden Administration, and the American people deserve to know why. Based on public statements by senior officials, Powell’s second stint at the Federal Reserve may represent a concerning departure from past precedent that sought to protect independent agencies from a given Administration’s policy goals. With inflation continuing to climb and efforts to double down on the priorities of the climate lobby driving gas prices still higher, Powell’s renomination may represent the clearest sign yet of the Administration’s priority of fighting climate change over inflation. FGI will continue to pursue these documents so the American public can have an accurate picture of the federal government’s priorities.”