Sen. Pat Toomey sent letters to the leaders of three regional Federal Reserve Banks questioning them on their work supporting “politically charged social causes” like racial justice that fall outside their mandates, according to a report.
Toomey (R-Pa.), ranking Republican on the Senate Banking Commission, wrote to the heads of the Atlanta, Boston and Minneapolis Reserve Banks to point out that their work on racial and social issues is “wholly unrelated to the Federal Reserve’s statutory mandate,” the Wall Street Journal reported.
“All of the policy prescriptions recommended to treat the presumed ubiquity of racism required a more intrusive and expansive government,” Toomey wrote.
The senator wrote that “racism is abhorrent and has no place in our society” and he supports “examining economic disparities,” but warned that “this subject matter is fraught with ideological assumptions and interpretations.”
Raphael Bostic, president of the Atlanta Fed, said if he took over for Jerome Powell, he would push the central bank toward economic inclusivity and equity. The Washington Post via Getty ImagesHe sent a similar letter in March to the Federal Reserve Bank in San Francisco about its focus on climate issues.
The Federal Reserve is designed to be free of political influence and should be focused on “its mission of supporting maximum employment and stable prices,” the mission statement on its website says.
Toomey said pursuing non-monetary policies could bring “reputational damage” to the Federal banks, Toomey said, Fox Business reported.
The report noted that Raphael Bostic, the first black president of the Atlanta Fed, told Axios that if he replaced Jerome Powell as Fed chairman, he would push the central bank toward economic inclusivity and equity after decades of discrimination by banks and the housing markets.
“History really left a certain group of people at a tremendous disadvantage and we should be talking about that,” Bostic said. “We’re now having different conversations. And I think that’s really an important thing.”
Neel Kashkari, head of the Minneapolis Fed, is of Indian descent.
Minneapolis Federal Reserve Bank president Neel Kashkari posted on Twitter about the killing of George Floyd. Getty ImagesFollowing the death of George Floyd at the hands of Minneapolis police last year, Kashkari posted on Twitter that the incident indicated “institutional racism that is actively taught and reinforced.”
Toomey said the Federal Reserve Banks, including the Minneapolis Fed, have waded into “politically-charged causes, like racial justice activism.”
He noted that the Minnesota Fed’s 2020 annual report letter “renewed our commitment to dismantling structural racism.”
