With the beginning of the new month comes the end of an era, when President Trump announced on Thursday in the Rose Garden of the White House his nomination for the new Federal Reserve Chair, lawyer and investment banker, Jerome Powell, to replace Janet Yellen, whose term ends in February.
Trump says that, with Powell, holding the reins, he would be able to provide the “strong leadership” that is needed, or as some critics would say, which Trump wants.
What the president also wants, among other things, is an easy confirmation, after 10 months of an administration that has seen its shares of mostly downs, and very few ups, whether it be in legislative success, or critical approbation, as his ratings continue to tank.
While Powell’s nomination, was expected, there was also a shortlist that included acclaimed Stanford economist John Taylor, but it was the sense in Washington, that Trump needed to have an easy win with this job, and a hassle-free confirmation.
Yellen, who Trump had pilloried on the 2016 campaign trail, even saying that she should be “ashamed” of the way that she ran the Fed, came out with words of praise for her, even using her first name, and that she was “a wonderful woman who has done a terrific job,” and going further that “she is also a spectacular person.” In another remarkable departure he said, “Janet, thank you very much. We appreciate it.”
In yet another departure from tradition he did not, like his predecessors, reappoint a Fed chair, that was also a member of the opposition party.
Many have said that this is the ideal man for the job, because he will continue the cautious, dovish, and date driven position that was characteristic of Yellen, as she easily navigated an often rocky landscape with ease, and one that he easily knew having served with her these last four years, and also has the experience of being on the board of governors, since 2012
Some of her notable achievements consisted of leading what was a bullish stock market, low interest rates, adjusted for, and only by the data, and the maintenance of a $4.5 trillion balance sheet, mostly bonds, to help stimulate the market during the Great Recession.
Those super low interest rates have been raised four times, and a fifth is expected in December.
But, she had her detractors, most notably, Jeb Hensarling, House Financial Services Chairman Jeb Hensarling (R-Tex.) told Yellen.when as required, she appeared before the House, this year, “After eight years, there is zero evidence that zero interest rates and a bloated Fed balance sheet lead to a healthy economy."
She responded that Fed officials do not feel the bond holdings should be reduced until they have raised its benchmark rate, currently at a range of 0.5 percent to 0.75 percent, to a more normal level of 1.24% to 1.5 %, which would give the Fed room to lower the rate if the economy was given an unexpected jolt. Yellen also noted that she was averse to creating formulas to set interest rates, and that “no single formula offers the flexibility the Fed needs in making decisions,” and that using them “would result in poor economic performance."
Hensarling who recently announced his retirement from Congress was disappointed that a hardliner was not nominated, but also gave his support to Powell, but still maintained his need for deregulation, that has become the watchword in the Administration since January.
Other critics want to see a regulatory environment that favors smaller banks over larger ones, and that they felt was a byproduct of Yellen’s era.
Still others are concerned, even upset, that Powell, who uses the nickname, Jay, does not have the requisite PhD in economics that his predecessors have had. In a town, where you can’t swing the proverbial cat without hitting a lawyer; this may be the ultimate insult.
Paul Ashworth, chief U.S. economist at forecasting firm Capital Economics, in particular, made some pointed, and critical remarks, when he said, "Powell's resume is not up to the standards we would expect of a nominee for Fed Chair,” reported CNBC, and that, "The risk of a serious policy mistake — in either direction — will arguably be higher under Powell's leadership than under Yellen's."
Yet Gary Cohn, the director of the National Economic Council, and another investment banker, (holding only a bachelor’s degree) called him a “spectacular choice.”
A Washington native, with an undergraduate from Princeton, he took his law degree from Georgetown, a training ground, of sorts, for the federal government; that should be helpful, in that he knows, as the old adage says, “where the bodies are buried.”
Despite absence of the doctorate, and the experience of Yellen in labor market relations, and her predecessor Ben Bernanke in financial crisis management, Powell is a very rich man with an estimated worth of $55 million, no small change for someone who also worked for the prestigious equity firm, the Carlyle Group.
Money, as the old song says, may not buy you love, but he may not need it, despite the sniping of some of his critics in a town where holding a doctorate has become nearly ubiquitous with federal fame.
Powell has said that he will perform “with objectivity, based on the best available evidence,” sounding very much like his soon-to-be predecessor.
Trump says that, with Powell, holding the reins, he would be able to provide the “strong leadership” that is needed, or as some critics would say, which Trump wants.
What the president also wants, among other things, is an easy confirmation, after 10 months of an administration that has seen its shares of mostly downs, and very few ups, whether it be in legislative success, or critical approbation, as his ratings continue to tank.
While Powell’s nomination, was expected, there was also a shortlist that included acclaimed Stanford economist John Taylor, but it was the sense in Washington, that Trump needed to have an easy win with this job, and a hassle-free confirmation.
Yellen, who Trump had pilloried on the 2016 campaign trail, even saying that she should be “ashamed” of the way that she ran the Fed, came out with words of praise for her, even using her first name, and that she was “a wonderful woman who has done a terrific job,” and going further that “she is also a spectacular person.” In another remarkable departure he said, “Janet, thank you very much. We appreciate it.”
In yet another departure from tradition he did not, like his predecessors, reappoint a Fed chair, that was also a member of the opposition party.
Many have said that this is the ideal man for the job, because he will continue the cautious, dovish, and date driven position that was characteristic of Yellen, as she easily navigated an often rocky landscape with ease, and one that he easily knew having served with her these last four years, and also has the experience of being on the board of governors, since 2012
Some of her notable achievements consisted of leading what was a bullish stock market, low interest rates, adjusted for, and only by the data, and the maintenance of a $4.5 trillion balance sheet, mostly bonds, to help stimulate the market during the Great Recession.
Those super low interest rates have been raised four times, and a fifth is expected in December.
But, she had her detractors, most notably, Jeb Hensarling, House Financial Services Chairman Jeb Hensarling (R-Tex.) told Yellen.when as required, she appeared before the House, this year, “After eight years, there is zero evidence that zero interest rates and a bloated Fed balance sheet lead to a healthy economy."
She responded that Fed officials do not feel the bond holdings should be reduced until they have raised its benchmark rate, currently at a range of 0.5 percent to 0.75 percent, to a more normal level of 1.24% to 1.5 %, which would give the Fed room to lower the rate if the economy was given an unexpected jolt. Yellen also noted that she was averse to creating formulas to set interest rates, and that “no single formula offers the flexibility the Fed needs in making decisions,” and that using them “would result in poor economic performance."
Hensarling who recently announced his retirement from Congress was disappointed that a hardliner was not nominated, but also gave his support to Powell, but still maintained his need for deregulation, that has become the watchword in the Administration since January.
Other critics want to see a regulatory environment that favors smaller banks over larger ones, and that they felt was a byproduct of Yellen’s era.
Still others are concerned, even upset, that Powell, who uses the nickname, Jay, does not have the requisite PhD in economics that his predecessors have had. In a town, where you can’t swing the proverbial cat without hitting a lawyer; this may be the ultimate insult.
Paul Ashworth, chief U.S. economist at forecasting firm Capital Economics, in particular, made some pointed, and critical remarks, when he said, "Powell's resume is not up to the standards we would expect of a nominee for Fed Chair,” reported CNBC, and that, "The risk of a serious policy mistake — in either direction — will arguably be higher under Powell's leadership than under Yellen's."
Yet Gary Cohn, the director of the National Economic Council, and another investment banker, (holding only a bachelor’s degree) called him a “spectacular choice.”
A Washington native, with an undergraduate from Princeton, he took his law degree from Georgetown, a training ground, of sorts, for the federal government; that should be helpful, in that he knows, as the old adage says, “where the bodies are buried.”
Despite absence of the doctorate, and the experience of Yellen in labor market relations, and her predecessor Ben Bernanke in financial crisis management, Powell is a very rich man with an estimated worth of $55 million, no small change for someone who also worked for the prestigious equity firm, the Carlyle Group.
Money, as the old song says, may not buy you love, but he may not need it, despite the sniping of some of his critics in a town where holding a doctorate has become nearly ubiquitous with federal fame.
Powell has said that he will perform “with objectivity, based on the best available evidence,” sounding very much like his soon-to-be predecessor.
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