Fed chairman Jerome Powell described the development of American energy independence as “miraculous” and warned that ending fracking and extraction of shale oil would not be good for the economy.
In testimony before a congressional panel Wednesday, Powell expressed his view that the U.S. economy is growing at the appropriate rate, inflation is low and under control, and interest rates are unlikely to change in the near future. He told lawmakers that the U.S. labor market appears strong, wages are rising without creating pricing pressure, and consumer confidence is high.
The Fed chair was pressed by Senator Ted Cruz (R-Texas) to answer questions about fracking, which was praised by Powell’s predecessor Ben Bernanke.
All the leading Democratic presidential candidates want to limit or ban fracking, the key technology that has allowed the U.S. to tap shale for energy and become a net exporter of oil. Front-runners Elizabeth Warren and Bernie Sanders would ban fracking altogether, as would Kamala Harris, Corey Booker, and Tulsi Gabbard. Joe Biden and Pete Buttigieg have called on a ban on new fracking, with Buttigieg saying he would phase out all existing fracking over time.
“I think to shut down the shale industry, that would probably not be a good thing for the economy,” Powell said.
He described the achievement of U.S. energy independence as “miraculous” and a great benefit to the U.S. economy.
Sen. Cruz also asked Powell for his views of the Democratic proposals to tax wealth in addition to income or to raise corporate taxes. Powell declined to give an opinion, saying it would be inappropriate for him to take a stance on political issues.