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Powell is ‘the right person’ to keep the Fed nonpartisan: Sen. Jon Tester (D-MT)

Senator Jon Tester (D-MT) joins Yahoo Finance Live to discuss expectations for Fed Chair Jerome Powell's re-confirmation hearing, inflation, the economy, and the STOCK Act.

Video Transcript

- Federal Reserve Chair Jerome Powell is set to appear before the Senate Banking Committee tomorrow, as lawmakers consider his nomination for a second term leading the Fed. To discuss this and more, we're welcoming in Senator Jon Tester from Montana, chairman of the Senate Veterans Affairs Committee, as well as member of the Senate Banking Committee. Senator Tester, it's great to have you on. And thank you so much for taking the time to speak with us this afternoon.

JON TESTER: Thanks for having me on. I appreciate the opportunity.

- Senator, I first want to ask about the nomination hearing for Chair Powell tomorrow. What do you want to ask of him, and what issues do you want to see him address?

JON TESTER: So I think he's going to have to address the economy, where we're at in the economy, how the economy is growing, what impact potential inflation could have, both in the short term and the long term, on our economic growth. I think he also needs to talk about how the Fed operates and why it needs to be kept as a nonpartisan institution, if that's what you want to call it, and how he intends to move it forward in a nonpartisan way.

I think-- I have been a supporter of Chairman Powell. I think, number one, he's done a good job leading us out of an unprecedented pandemic. And the second thing is he's done a good job keeping the Fed in nonpartisan status. He's had a lot of pressure to push it to the left or push it to the right, and he has not done that. And then the last thing I think is critically important with anybody that serves in public office is accessibility and transparency. And I think that he's been very, very accessible for me, and been very forthright when I've asked him questions, whether it's in committee or on the phone or in person, about where he sees the economy and the options that the Fed has in front of it.

- Senator, thank you for joining us. When you talk about the chair, you know, guiding the Board of Governors and the FOMC in that direction, he also has to, though, balance what President Biden and the administration may put before, you know, Senate Banking at one point, and the nominees to join the Fed. And you just said not political, and yet there's pressure from fellow Democrats to do just that. Why does that fall in the responsibility of the chair, and not, say, your fellow Democrats and the president?

JON TESTER: Well, I think it falls on everybody. I mean, I think we saw it in the previous administration, where folks were trying to push him in different directions on the Republican side of things. I don't think it's right when either side does that. And I think why it's on him is because he has fended off pressure to move to the right or to do things that may be politically opportunistic, but not necessarily in the best interest of the country. And so it's going to be on his shoulders once he gets confirmed-- and I do believe he will get confirmed-- to make sure he runs the Fed with a steady hand and moves the country forward with that-- in that same nonpartisan way.

So look, I know you are correct. There are people on both sides of the aisle that try to push the Fed for political reasons. I think it's critically important we keep it nonpartisan, and I think he's the right person to help do that.

- In terms of the inflation that we're seeing across the US economy right now, we have a consumer price index coming out on Wednesday for December, so after the Senate Banking nomination hearing will be occurring. How much of this, in terms of the inflation that we're seeing right now, falls to the Fed and do you want to see Fed Chair Jerome Powell address, versus what the administration can do and what congressional lawmakers can actually address from a policy standpoint?

JON TESTER: That's a great question. And once again, I think it's all hands on deck when it comes to inflation and moving the inflation arrow and-- so it's not as high as it is currently. I believe that Congress has done some things and could do some more things to help, you know, cut costs for families and businesses. I think the bipartisan infrastructure package is one of them. And I do think the Fed can do some things, too, with interest rates and other tools out there.

And I hope tomorrow during the banking hearing with Chairman Powell that he addresses some of the tools that are out there. I don't necessarily want to hear what he intends to do, because I think that's a broader conversation he needs to have with the Fed. But in the end, I think that there are tools out there that both-- that everybody can use, the president, the Congress, and the Fed can use. And I think we all need to do our part to reduce inflationary impacts.

- Just want to ask you a quick question because, back in 2011, you were at the forefront of accountability-- we were just talking in the last segment about members of Congress trading stock. And we should point out, 10 years ago, you were the person who pushed for the legislation for disclosure. But now, we have the proposal from Jon Ossoff, enough is enough. And we heard what Nancy Pelosi said. What would you say today to your fellow members of Congress about those of us in the general public, when we look at others in Congress, you know, the rate of return for senators was 12% better than the rest of us. What does that say?

JON TESTER: Well, I think accountability is critically important when you hold public office, and I think that there are things that, when you do them, you'd better be doing it for the best interests of the country, and not to improve your own status. Look, I fall much closer to where Jon Ossoff is. What-- I think that we're very, very close to the Stock Act. I don't know that people need to get rid of all their stocks when they get in public office, but they certainly shouldn't be trading them once they get in public office. So what you came in with is what you're going out with. And I think that's what's really important here.

And look, I know there are a lot of claims out there of people that have been in my position that have used that position for insider trading. If that, in fact, proves to be true, they need to be punished to the full extent of the law. And as I said before, if we need to do more on stock trading, I am absolutely, unequivocally open to taking a look at any bill that comes down the path, including the bill that Senator Ossoff has.

- And one last question for you, sir. I had the great honor of visiting your state about four or five years ago. Haven't been back. I want to get there, though. Do you get to talk to the president one on one? When we talk about inflation, I realize the questions tomorrow to Jay Powell are going to be key, but do you get to talk to President Biden? Because your state encompasses so many different things, from mining to agriculture, and all of it taking a big hit because of inflation.

JON TESTER: Look, I've had the opportunity because of my work on the bipartisan infrastructure package and because I served with Joe Biden in the United States Senate to have had an opportunity to visit with President Biden more than any other president that I've served with. And I know he's a busy, busy man, and I know he's got a lot of things that he's working on, but President Biden has always had the time to visit with me. And I really appreciate that, because you're right, the economy in Montana is a very diverse economy, and it's going to continue to be diverse moving into the future. And I think input from the ground, which I hope is what I'm giving the president, is critically important for the president to hear.

And let me give you an example of that. Six months ago, eight months ago, I heard from some of my suppliers-- I'm a farmer in my real life-- that they were having a hard time getting farm parts. I relayed that to the president-- to the Office of the President. Not to Joe directly, but to people right next to him, and said, you guys need to be made aware this is what's going on on the ground. I think if you're going to make good rules, if you're going to make good legislation, you have to have good information. If you have good information, you're much more inclined to make good decisions. And that's what I try to give the president. I try to give the president a Montana perspective on what's going on on the ground when I visit with him.

- Senator Jon Tester of Montana, thank you so much for your time. And we're looking forward to following tomorrow's hearing with Fed Chair Jerome Powell before the Senate Banking Committee, as well.

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