Richard Clarida, President Donald Trump’s nominee for the No. 2 job at the Federal Reserve, spent most of his appearance before lawmakers Tuesday making his views almost indistinguishable from the U.S. central bank’s No. 1 official.
From his vision of financial regulation, to his take on Fed’s past use of bond purchases, to his view of the labor market, Clarida stuck to positions during Senate Banking Committee testimony that aligned with those of Fed Chairman Jerome Powell.
“The striking thing now about Fed leadership is how much they look like Jay Powell,” said Vincent Reinhart, a former Fed policy adviser who is now chief economist at BNY Mellon Asset Management.
Testifying together, Clarida and Fed governor nominee Michelle Bowman “showed themselves to be team players, understanding the script and understanding their roles,” Reinhart said.
Clarida told senators he supported regulators’ review of post-crisis banking rules, tailoring it when possible to be more efficient, but without eroding the safety of the financial system.
“There are opportunities to tailor regulations appropriately,” he said, adding that he put a priority on “preserving the substantial gains in resiliency and stability of our financial system”’ since the crisis.
That’s similar to Powell, who at his swearing-in ceremony in February pledged to “preserve the essential gains in financial regulation while seeking to ensure that our policies are as efficient as possible.”
Clarida also assured Rhode Island’s Jack Reed, a Democrat, that he wouldn’t focus exclusively on the very low unemployment rate in assessing the U.S. work force, but would monitor broad measures of employment — a stock line for Fed officials.
Asked by Republican Pat Toomey from Pennsylvania about the Fed’s use of large-scale asset purchases to fight the most recent recession, Clarida again sounded very much like his would-be boss.
“My general feeling is that there are benefits and costs” to the policy known as quantitative easing, Clarida said. He said he thought its first use in 2008 “made sense,” but that “the benefits of QE diminished as more and more rounds were added.”