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The Senate Banking Committee yesterday heard from Jerome Powell, the president's nominee to serve as chair of the Federal Reserve Board. During his testimony, Powell commented on the strength of the financial market and the need for regulatory reforms, and signaled a December rate hike is likely.

The committee must still vote to advance Powell's nomination to the full Senate, which has yet to be scheduled. The nomination will then move to the full Senate for a confirmation vote. If confirmed by the full Senate, Powell will serve a four-year term as chair; he has served as a governor on the board since 2012.

During Tuesday's hearing, Powell stated his commitment to reducing regulatory burdens on financial institutions. When asked about the Fed's likelihood to raise interest rates, Powell said that "the case for raising interest rates at our next meeting is coming together." According to minutes from the Federal Open Market Committee's last meeting, committee members have worried about low inflation levels but a rate hike is supported by the continued strengthening in the labor market and increased economic activity.

"At least on the monetary policy front, Mr. Powell is fulfilling expectations as one whose views are in line with those of current Chair [Janet] Yellen," said NAFCU Vice President of Research and Chief Economist Curt Long. "The market reaction to the hearing was relatively tame, and mostly focused around Powell's comments on regulation. A quarter-point rate hike in December is essentially a done deal at this point."

Yellen's term ends on Feb. 3, though she recently submitted her resignation from the board, which will be effective upon the swearing in of Powell.

The NAFCU Board of Directors met with Powell at Federal Reserve headquarters in Washington in 2014 and 2015 to present its annual Report on Credit Unions, which details the latest issues affecting credit unions and the impact the Fed's actions have on the industry.