President Trump Says “Independent” Central Bank Nominee For Fed Chair Is Jerome Powell

For some reason President Trump kept repeating “sound” monetary policy, not that debt based fiat currency has anything to do with sound money…

And so while not re-appointing Janet Yellen, President Trump nominated Jerome Powell to be the next Fed Chair.

One thing seems certain: Nominating “dove” Jerome Powell is essentially a continuation of the same old, same old given to us under Janet Yellen. Here’s the WSJ:

On Interest Rates

 

Mr. Powell, 64 years old, has backed Ms. Yellen’s policy of gradually raising interest rates if the economy improves as projected. In recent public remarks he has sounded an optimistic note, saying he expects inflation to move up to the Fed’s 2% target, economic growth to remain steady and the unemployment rate to fall further. “I would view it as appropriate to continue to gradually raise rates,” he said in June.

 

On Shrinking the Fed’s Portfolio

 

Mr. Powell in September voted in favor of beginning the yearslong process of winding down the central bank’s $4.5 trillion portfolio. Like Ms. Yellen, Mr. Powell has said the Fed could resort to new rounds of asset purchases in another crisis if the economy needs more stimulus. Putting new assets on the Fed’s balance sheet should be an option “only in extraordinary circumstances,” he said in February.

 

On Monetary Policy Rules

 

Mr. Powell has joined several of his Fed colleagues in warning against relying too heavily on mathematical rules such as the so-called Taylor Rule to guide monetary policy. That could put him at odds with congressional Republicans who have pushed the Fed to adopt such a formula in an attempt to make Fed policy-making more transparent and predictable. “Simple policy rules are widely thought to be both interesting and useful, but to represent only a small part of the analysis needed to assess the appropriate path for policy,” he said February. “I am unable to think of any critical, complex human activity that could be safely reduced to a simple summary equation.”

 

On Fannie Mae and Freddie Mac

 

Mr. Powell has called on Congress to overhaul the housing finance system, saying he’d like to see the country’s two large mortgage-finance firms, Fannie Mae and Freddie Mac, move out from under government conservatorship. More private capital in those firms would reduce the risk of a taxpayer-funded bailout in the event of a downturn, he said in a speech in July.  Although the Fed isn’t responsible for housing finance, it supervises some of the country’s largest lenders who frequently sell their loan to the two agencies. “No single housing finance institution should be too big to fail,” he said.

Here’s President Trump announcing the nomination:

Powell still needs to be confirmed, so nothing is set in stone.

Here’s Powell giving a speech earlier this year about cryptocurrencies: