Trump names Powell to lead US Federal Reserve
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”.
MONEY TALKS: Donald Trump and Jerome Powell