Nomination for the New Federal Reserve Chairman

Jerome Powell was officially nominated as Chairman of the Federal Reserve, bringing clarity to at least one uncertainty that has hung over financial markets. Below are some key points about the nominee:

  • Powell was first nominated to the Federal Reserve Board of Governors in 2012 by President Barack Obama and previously served at the Treasury Department under President George H.W. Bush
  • Though he has Washington experience he is not a career academic; rather he spent most of his career in banking with his most prominent role as a partner at The Carlyle Group
  • It is reported that he approaches things in a realistic and sensible manner rather than always holding firm to certain economic ideologies or theories.
  • Perhaps most importantly, he is considered to be neutral on monetary policy and is expected to continue with the policy normalization plan outlined by Janet Yellen
  • Janet Yellen’s term expires on February 3, 2018
  • We believe that Powell’s current involvement in the Federal Reserve provides a great deal of continuity for monetary policy. This provides stability for capital market expectations and minimizes the potential for friction from alternative nominees whose monetary policy views deviated from current policy.

 

Sources:
https://www.federalreserve.gov/aboutthefed/bios/board/powell.htm
https://www.bloomberg.com/news/articles/2017-11-01/here-s-what-you-need-to-know-about-powell-s-fed-chair-selection
Wells Fargo Economics; ‘Powell on Policy: What to Ask?’; November 2, 2017
http://image.mail1.wf.com/lib/fe8d13727664027a7c/m/2/powell-what-toask-20171102.pdf?utm_source=SFMC&utm_medium=email&utm_campaign=&utm_content=&utm_term=7230679&sid=23906

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