The Massachusetts progressive released questions to Powell on Thursday that ask what specific policies the Federal Reserve and Congress can implement to avoid the inequalities that marked the comeback from the 2008 financial crisis.
The new questions, submitted to the Fed through the Senate Banking Committee, come in response to Powell’s testimony before Congress last week on the bank’s response to the pandemic.
Jobs data released by the Bureau of Labor Statistics earlier this month showed that Black unemployment rose even as white unemployment fell. White unemployment fell to 12.4% in May from 14.2% in April, while Black unemployment rose to 16.8% from 16.7%. Hispanic unemployment fell from 18.9%, but remained extraordinarily high, at 17.6%.
Powell, an appointee of President Donald Trump who has led the Fed since early 2018, has emphasized the disproportionate effect of the downturn on Black and Hispanic households and women. He has not discussed specific remedies beyond boosting the economy more generally.
Warren competed for the Democratic presidential nomination before dropping out in March. During her campaign, Warren antagonized the wealthy and pressed for structural reforms to address inequality. She is reportedly being considered as presumptive Democratic nominee Joe Biden’s running mate.
Among the questions that Warren asked Powell: “Does the Federal Reserve currently consider the impact of its monetary policy decisions on racial inequality?”
Warren notes that after the last financial crisis, “white Americans recovered from the economic damage in a faster and more robust manner than Black and Hispanic households.”
“Do you expect the same trends to occur with the recovery from the current recession?” the question reads.
The Fed has unleashed a dramatic array of emergency programs to combat the economic toll of Covid-19, which sent the U.S. economy into recession in February.
The bank has said it is prepared to deploy as much as $2.3 trillion into the economy, though much of that has not yet been doled out.
Warren asked Powell if the Fed considers whether those programs and other measures “affect different racial groups in different ways?”
In addition to her questions about racial inequality, Warren also asked about the soundness of the financial system. There is no deadline for Powell’s response.
The central banker acknowledged the disparities the economic consequences of coronavirus at a press conference earlier this month.
“Unemployment has gone up more for Hispanics, more for African Americans, and women have borne a notable share of the burden beyond their percentage in the workforce,” Powell said. “That’s really, really, really unfortunate.”
When Warren asked him about the issue at the Senate Banking Committee hearing last week, Powell said inequality was “not a healthy feature of our economy, now or ever.”
In addition to the economic toll, the available data suggests that the coronavirus is also disproportionately afflicting minority populations, according to the Centers for Disease Control and Prevention.
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