Trump names Pow­ell to lead US Fed­eral Re­serve

Weekend Post (South Africa) - - WORLD -

PRES­I­DENT Don­ald Trump on Thurs­day nom­i­nated Fed­eral Re­serve Gover­nor Jerome “Jay” Pow­ell to lead the US cen­tral bank, say­ing that the former in­vest­ment banker has the wis­dom and in­tel­li­gence to guide the world’s largest econ­omy.

Trump de­cided not to reap­point cur­rent Fed chair Janet Yellen, the first woman to over­see mon­e­tary pol­icy, de­spite prais­ing her ex­cel­lent man­age­ment of the US econ­omy over the past four years.

“He is strong. He’s com­mit­ted. He’s smart,” Trump said of Pow­ell dur­ing the cer­e­mony in the White House Rose Gar­den.

An­a­lysts say choos­ing Pow­ell al­lows Trump to put his own im­pri­matur on the cen­tral bank with a min­i­mum of dis­rup­tion.

“Pow­ell al­lows Trump to change the Fed lead­er­ship with­out chang­ing the ba­sic mon­e­tary pol­icy strat­egy. That strat­egy has been largely suc­cess­ful,” Univer­sity of Ore­gon econ­o­mist Tim Duy said.

The pres­i­dent’s de­ci­sion to re­place the sit­ting Fed chair is some­thing no first-term US pres­i­dent had done in 40 years.

He has made it clear he has no prob­lem up­set­ting tra­di­tion, and specif­i­cally cited his de­sire to leave his mark on the Fed dur­ing the very pub­lic search process.

Still, in choos­ing the 64-year-old Pow­ell, a Repub­li­can, Trump took a less rad­i­cal course. Pow­ell has echoed the ad­min­is­tra­tion’s views in favour of bank dereg­u­la­tion but has sup­ported the Yellen Fed’s grad­ual in­ter­est rate in­creases.

Trump has re­peat­edly hailed the coun­try’s smooth eco­nomic progress and Wall Street’s suc­ces­sive ral­lies, mak­ing the prospect of dis­rupt­ing the sta­tus quo at the Fed par­tic­u­larly risky.

Pow­ell is the lat­est in a string of former in­vest­ment bankers Trump has tapped for high-pro­file posts.

He will re­quire Se­nate con­fir­ma­tion, but he al­ready went through that process when he be­came a mem­ber of the Fed’s board of gov­er­nors.

In an­other break with tra­di­tion, Pow­ell, said to have a per­sonal for­tune of be­tween $20- and $55-mil­lion, (about R300- to R800-mil­lion) is not a trained econ­o­mist. Even so, Terry Shee­han of Ox­ford Eco­nom­ics said he had re­ceived a work­ing ed­u­ca­tion and was “well qual­i­fied” to serve as Fed chair.

But she warned he might have to de­fend the Fed’s in­de­pen­dence “in a hos­tile po­lit­i­cal en­vi­ron­ment”.

PHO­TO­GRAPH: REUTERS/CAR­LOS BARRIA

MONEY TALKS: Don­ald Trump and Jerome Pow­ell

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