Wall Street Banks, The Fed and Politics

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On March 31, an emergency pandemic regulatory relief measure that for the past year has allowed Wall Street banks to hold less loss-absorbing capital against certain assets is due to expire.

Appearing to yield to the industry could put a second term in jeopardy for Powell, who was appointed Fed chief by former Republican President Donald Trump, because anti-Wall Street progressives control the Senate Banking Committee, which vets Fed nominees, and hold sway over White House financial nominees, analysts said.

“Powell (is) in a politically precarious position,” said Isaac Boltansky, director of policy research at Washington-based Compass Point Research & Trading. “This decision will leave someone politically important unhappy with him.”

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