Fed Chair Powell Assures Treasury Payment System Security, Addresses Musk and CFPB Concerns
During a Senate Banking Committee hearing, Federal Reserve Chair Jerome Powell addressed concerns raised about the Treasury payment system and the activities of Elon Musk.
Treasury Payment System Integrity
In response to Senator Mike Rounds' query, Powell stated his belief that the Treasury payment system is secure. He emphasized the Fed's commitment to its integrity and resilience, highlighting its importance to the public.
Musk's Treasury Access
When asked by Senator Raphael Warnock about Musk's potential access to the Fed, Powell responded negatively, stating that he did not believe Musk had attempted to.
Democratic Concerns
Democratic lawmakers expressed interest in Powell's perspective on Musk's actions at the Treasury Department and the Consumer Financial Protection Bureau (CFPB). Powell clarified that the Fed does not make spending decisions in these matters.
CFPB's Mandate
Senator Elizabeth Warren highlighted that the CFPB has sole authority over consumer finance issues among U.S. regulators. Powell acknowledged the potential impact of the agency's dysfunction on consumer protection.
Republican Inquiries
Republican legislators focused on bank capital standards and the "debanking" issue. Powell indicated the need to reassess the latter.
Bank Capital Proposal
Powell discussed the Fed's collaboration with the Office of the Comptroller of the Currency and the FDIC on a revision of the Basel III bank capital proposal. He believes regulators can progress on this matter swiftly.
Economic Impact of Tariffs
Powell declined to speculate on the economic or interest rate effects of potential Trump tariffs, acknowledging inflation as a possible outcome.
Fed Board Member Removal
Powell reiterated that attempting to remove a Fed board member by the President is prohibited by law.