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Senate impasse over Fed ends

Economist from Harvard one of

Harvard’s Jeremy Stein has been named to the Fed Board of Governors.
Harvard’s Jeremy Stein has been named to the Fed Board of Governors.Andrew Harrer/BloomberG News

WASHINGTON — The Senate on Thursday confirmed two nominees chosen by President Obama for the Federal Reserve Board of Governors, overcoming Republican objections and bringing the seven-member board to full strength for the first time since 2006, before the economic crisis struck.

Harvard economist Jeremy Stein and Jerome Powell, an investment banker and lawyer, were confirmed easily after a morning of debate. The vote for Stein was 70-24, and for Powell, 74-21.

For months, Senator David Vitter, a Louisiana Republican and a member Banking Committee, had been holding up the nominations, saying the two men would be ‘‘rubber stamps’’ for the policies of Fed chairman Ben S. Bernanke — and, by implication, the Obama administration.

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But in the aftermath of JP Morgan Chase’s recently acknowledged trading losses, which have raised questions about whether the Fed and other regulatory agencies have a tight enough hand on the regulatory reins, Senate leaders found there were enough votes to get around procedural obstructions under the Senate’s rules.

Some senators even saw signs of a broader comity in the Senate’s ability to proceed on these nominations; for too long, said Senator Lamar Alexander, Republican of Tennessee, being in the Senate had felt like ‘‘being invited to join the Grand Ole Opry and not being allowed to sing.’’

‘‘We hope it can set the tone for agreements well into the future, this year and in 2013 as well,’’ said Senator Charles E. Schumer, Democrat of New York.

A White House statement expressed gratitude that ‘‘both parties have come together’’ for the votes on Stein and Powell, adding, ‘‘Today’s broad bipartisan vote in the Senate reflects their deep knowledge of economic and monetary policy, as well as their distinguished backgrounds and unique experience.’’

Vitter made it clear that he opposed the candidates, and that he opposes the Fed’s monetary policy of low interest rates.

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‘‘This Federal Reserve has set essentially a zero interest rate policy, an extremely easy policy for an extended period of time,’’ he said, calling it a ‘‘very dangerous policy.’’

The two nominees will join a broad consensus among the Fed governors on monetary policy, and their arrival is unlikely to shift things significantly in that regard.