(Bloomberg) -- Federal Reserve Chairman Jerome Powell rejected a U.S. senator’s criticism of BlackRock Inc (NYSE:BLK).’s involvement in coronavirus-relief efforts because of its interests in China, saying the central bank’s sole focus was on supporting American jobs.
“We hired BlackRock for their expertise in these markets,” Powell said to Senator Martha McSally, a Republican from Arizona. “It was done very quickly due to the urgency and need for their expertise. We’re not trying to reach out for other public policy objectives.” BlackRock has been hired by the Fed to manage potentially billions of dollars of assets purchased under emergency lending facilities launched to keep credit flowing during the pandemic.
Powell said the Fed plans to rebid the contract in the future. The firm stands to bring in as much as $40 million a year in fees to purchase and oversee corporate debt as part of a U.S. program to juice capital markets and counter the economic calamity of the pandemic, according to an analysis of the firm’s contract for the deal.
China “unleashed this virus on America and the world with their classic communist cover-up” and BlackRock is “one of the leading investment banks in Chinese funds,” McSally said.
Powell didn’t comment on China, but said the topic was not pertinent to the Fed’s emergency lending program. “All large asset managers buy Chinese securities. These are global asset managers. I’m not here to defend or criticize them for that. It’s not really relevant to the work we want them to do.”
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