{"id":50349,"date":"2017-11-03T07:31:14","date_gmt":"2017-11-03T07:31:14","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=50349"},"modified":"2017-11-03T07:31:14","modified_gmt":"2017-11-03T07:31:14","slug":"trump-taps-fed-centrist-powell-to-lead-u-s-central-bank","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/trump-taps-fed-centrist-powell-to-lead-u-s-central-bank.html","title":{"rendered":"Trump taps Fed centrist Powell to lead U.S. central bank"},"content":{"rendered":"

Trump taps Fed centrist Powell to lead U.S. central bank<\/span><\/strong><\/span><\/h2>\n

Trump taps Fed centrist Powell to lead U.S. central bank: President Donald Trump on Thursday tapped Fed Governor Jerome Powell to become head of the U.S. central bank, breaking with precedent by denying Janet Yellen a second term but signaling a continuation of her cautious monetary policies.<\/span><\/p>\n

Powell, 64, a lawyer and investment banker appointed to the Fed board in 2012 by then-President Barack Obama, emerged as Trump\u2019s choice from a slate of possible nominees that included Yellen and others who may have pursued a sharp policy shift.<\/span><\/p>\n

In an announcement at the White House, Trump described the soft-spoken Powell as a smart and committed leader who would build on Yellen\u2019s achievements in steering the U.S. economy after the recovery from the 2007-2009 financial crisis.<\/span><\/p>\n

\u201cIf we are to sustain all this progress, our economy requires sound monetary policy and prudent oversight,\u201d Trump said as Powell looked on. \u201cWe need strong and steady leadership at the U.S. Federal Reserve … He will provide exactly that.\u201d<\/span><\/p>\n

Powell has worked alongside Yellen for the past five years, backing her direction on monetary policy and, in recent years, sharing her concerns that weak inflation justified a continued cautious approach to raising interest rates.<\/span><\/p>\n

Yellen\u2019s four-year term as Fed chief ends in early February 2018. She will be the first U.S. central bank chief not to be renominated to a second term since 1979.<\/span><\/p>\n

Trump on Thursday lauded Yellen\u2019s stewardship but did not say why he decided to pass her over for another term. The Republican president said he was impressed by Powell\u2019s experience in the private-sector and \u201creal-world perspective\u201d to government.<\/span><\/p>\n

\u201cHe understands what it takes for our economy to grow,\u201d Trump said.<\/span><\/p>\n

Powell, who in the last 25 years has done a prototypical Washington circuit of government, private, and think tank jobs, pledged to be attuned to emerging financial risks and the impact the Fed has on average Americans.<\/span><\/p>\n

He will take over an economy that has been expanding for more than eight years and one that boasts an unemployment rate at more than a 16-1\/2-year low.<\/span><\/p>\n

\u201cMonetary policy decisions matter for American families and communities. I strongly share that sense of mission and am committed to making decisions with objectivity and based on the best available evidence,\u201d Powell said in brief remarks after Trump\u2019s announcement.<\/span><\/p>\n

His nomination now goes to the Republican-controlled Senate for confirmation.<\/span><\/p>\n

\u201cI\u2018m encouraged by President Trump\u2019s choice,\u201d Senate Majority Leader Mitch McConnell said in a statement that pledged \u201ctimely\u201d consideration of the nomination.<\/span><\/p>\n

There was little apparent market reaction to Powell\u2019s nomination, which had been expected. Investors were largely focused on the release of details of a Republican plan to broadly change the U.S. tax code.<\/span><\/p>\n

CLASSIC COMPROMISE<\/span><\/p>\n

By setting benchmark short-term interest rates, the Fed broadly influences borrowing and lending conditions in the economy. Since the crisis, the central bank has gained more power over the financial sector, while becoming more concerned about issues like income inequality.<\/span><\/p>\n

Yellen, a Fed veteran who has served at all levels of the sprawling central bank system, said in a written statement that she would work with Powell \u201cto ensure a smooth transition.\u201d<\/span><\/p>\n

Trump\u2019s decision, after a broad and very public search, offers what analysts said was a classic compromise, allowing him to select his own Fed chief while getting continuity with the policies of the Yellen-run central bank.<\/span><\/p>\n

\u201cThe kernel of what this boiled down to is that in selecting Powell, (Trump) has all but selected Yellen,\u201d said Sarah Binder, a political science professor at George Washington University and author of a recent book on Fed politics. \u201cThere is not really much daylight, if any.\u201d<\/span><\/p>\n

In June, Powell laid out both a defense of the Fed\u2019s gradualist path and a critique of those, including some of his competitors for the Fed job, who argued the central bank had increased the risk of high inflation and other problems.<\/span><\/p>\n

Trump on several occasions has said he would prefer rates to stay low, a position apparently at odds with some of those who were on his short list, particularly Stanford University economist John Taylor and former Fed Governor Kevin Warsh. Top White House economic adviser Gary Cohn also was a contender.<\/span><\/p>\n

Powell has been a reliable supporter of the consensus forged by Yellen on the policy-setting Federal Open Market Committee, and likely will be seen as a less risky choice with the economy growing solidly and U.S. stock markets near record highs.<\/span><\/p>\n

The Fed has raised rates twice this year and is widely expected to do so again next month.<\/span><\/p>\n

But Powell has gone further than his colleagues in calling to relax some of the stricter regulations imposed after the crisis, also important to Trump. Powell can now pursue that end along with Trump appointee Randal Quarles, the Fed\u2019s new vice chair for supervision.<\/span><\/p>\n

Though he will be the first Fed chief since the late 1970s without an advanced degree in economics, Powell brings market insights, Fed board experience and Republican ties that analysts say will likely make for a smooth confirmation and transition.<\/span><\/p>\n

Under President George H.W. Bush, Powell oversaw policy on financial institutions and debt markets as an undersecretary of the Treasury. From 1997 to 2005 he was a partner at the Carlyle Group, a private equity firm, and focused on public debt dynamics while at the Bipartisan Policy Center think tank.<\/span><\/p>\n

Yellen is entitled to remain as a Fed governor until 2024, though previous central bank chiefs have traditionally not stayed once a successor was in place.<\/span><\/p>\n

Source:http:\/\/www.reuters.com\/article\/us-usa-trump-fed-chair\/trump-taps-fed-centrist-powell-to-lead-u-s-central-bank-idUSKBN1D22MT<\/span><\/p>\n

\n\t\t\t
\n\t\t\t <\/div><\/div>\n\t\t