At the Fed's December meeting, it accelerated the end to its asset-buying program in order to combat inflation, according to meeting minutes. In response to the COVID-19 pandemic in early 2020, the Fed established monthly bond purchases — $80 billion in Treasury securities and $40 billion of mortgage-backed debt. At its meeting in early November, the Fed indicated that it would scale back its bond purchases by $15 billion a month starting in November, but at the December meeting, it unanimously agreed to accelerate the scale-back's pace to $30 million a month.
Separately, several senators asked Mr. Powell about ethics issues at the Fed. On Monday , Richard H. Clarida, the Fed's vice chairman, announced he will step down Friday , two weeks earlier than originally planned, amid questions about his trading activity in early 2020. And two Fed regional presidents stepped down last year after their 2020 financial disclosures showed they had held and traded financial assets while the Fed was actively supporting markets through the pandemic.
In response, Mr. Powell pointed to new rules the Fed is implementing to prohibit its policymakers and senior staff from purchasing individual stocks and limiting their trading activity. Those Fed members will be required to provide 45 days' advance notice for purchases and sales of securities, obtain prior approval for purchases and sales of securities and hold investments for at least one year.
The rules, which Mr. Powell said at the hearing will be put in place in the "near future," will make it so Fed officials have "no ability to time the market." He added: "We do take the need to protect our credibility with the public very seriously, and I think our new system is easily the toughest in government and the toughest I've seen anywhere."
Mr. Powell is expected to have bipartisan support for a second term. Both Sen. Sherrod Brown, D-Ohio, the committee's chairman, and Sen. Pat Toomey, R-Pa., its ranking member, said they will support his nomination.
The committee has yet to schedule a vote on Mr. Powell's nomination. On Thursday, it will hold a nomination hearing for Lael Brainard, a Fed board member since 2014 and Mr. Biden's nominee as Fed vice chairwoman.