Fed likely to hold rates steady at Yellen’s fi­nal meet­ing

Austin American-Statesman - - BUSINESS - By Martin Crutsinger Fed

Janet Yellen’s fi­nal Fed­eral Re­serve pol­icy meet­ing will likely bring an un­event­ful end this week to her four-year ten­ure as Fed chair but per­haps of­fer hints of the cen­tral bank’s ap­proach to in­ter­est rates in the months to fol­low.

Yellen, the first woman to lead the world’s most in­flu­en­tial cen­tral bank, will step down when her term ex­pires at the end of the week. She will be suc­ceeded by Jerome Pow­ell, a Fed board mem­ber whose nom­i­na­tion as chair­man the Se­nate ap­proved 84-13 last week.

Pow­ell, who has served on the cen­tral bank’s board since 2012, is a lawyer and in­vest­ment man­ager by train­ing and will be the first Fed leader in 30 years not to hold a Ph.D. in eco­nom­ics. Pres­i­dent Don­ald Trump chose Pow­ell for the post rather than of­fer Yellen a sec­ond term de­spite wide­spread praise for her per­for­mance. The ev­i­dence so far sug­gests that a Pow­ell-led Fed will gen­er­ally fol­low the same cau­tious ap­proach to rais­ing in­ter­est rates that Yellen pur­sued dur­ing her ten­ure as Fed chair, at least in its early months. With the job mar­ket healthy and in­fla­tion tame, most econ­o­mists say there is lit­tle rea­son for any abrupt change in Fed pol­icy.

Yellen “gets to leave on a high note, with strong growth and low un­em­ploy­ment,” said Diane Swonk, chief econ­o­mist and a manag­ing di­rec­tor at au­dit firm Grant Thornton.

The un­em­ploy­ment rate is at a 17-year low of 4.1 per­cent, and the econ­omy ex­panded at a solid 2.6 per­cent an­nual rate in the Oc­to­ber-De­cem­ber quar­ter, help­ing lift growth for all of 2017 to 2.3 per­cent. Syn­chro­nized growth in ma­jor re­gions across the global econ­omy has helped en­er­gize the U.S. econ­omy. And a sweep-

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.