Fed nominee Michael Barr calls inflation ‘far too high’

WASHINGTON — President Joe Biden’s pick to be the Federal Reserve’s top banking regulator pledged Thursday to help reduce high inflation and provide “clear rules” to govern financial innovation.

“I strongly believe that inflation is far too high today and I’m committed to bringing it down to the Federal Reserve’s target of 2%,” Michael Barr told members of the Senate Banking Committee, which is considering his nomination.

Inflation has soared to 8.3%, near a 40-year high, with the cost of items like food, gas and airline tickets having skyrocketed from 12 months earlier. The Fed is facing the difficult and high-risk task of curbing high inflation by sharply increasing interest rates without causing a recession. Widespread doubts about its ability to achieve that goal have helped send the stock market plunging.

Barr was a top Treasury Department official during the Obama administration and helped design the 2010 Dodd-Frank financial regulations after the devastating 2008 financial crisis. He is now the dean of the University of Michigan’s Gerald R. Ford School of Public Policy.

If approved by the committee and confirmed by the full Senate, Barr would join the Fed’s Board of Governors as the vice chair for supervision, a position created by the Dodd-Frank legislation. As one of seven members of the board, Barr would also have a permanent vote on interest rate decisions at each of the Fed’s eight policy meetings each year.

Barr received mostly mild questioning and faced little of the strong opposition that sank Biden’s first choice for the post, former Deputy Treasury Secretary Sarah Bloom Raskin.

Raskin ran into unanimous disapproval from Senate Republicans and from West Virginia Democratic Sen. Joe Manchin. They argued that she would go too far to weigh the impact of climate change as part of the Fed’s regulatory authority and possibly discourage banks from lending to oil, gas, and coal companies.

Barr sought to play down the…