Powell confirmed as next Federal Reserve chair

Jan 25, 2018, 01:43
Powell confirmed as next Federal Reserve chair

THE United States Senate yesterday confirmed former investment banker Jerome Powell as head of the Federal Reserve, putting President Donald Trump's pick in a role of enormous influence in the world's largest economy. Elizabeth Warren of MA have raised concerns about whether he would be too aggressive in dialing back post-financial crisis reforms.

Powell will inherit an economy exhibiting strong economic growth, which now stands at three percent, coupled with low inflation and a labour market where the number of jobless claims has recently reached a almost 45-year low.

He has lauded the central bank's patient approach, led by Yellen, in gradually raising interest rates and slowly unwinding the $4.5 trillion balance sheet that the Fed amassed to support the economy after the crash. The bank would need to minimise unemployment while managing inflation.

The upper chamber approved the nomination in a 84-13 vote.

There is also the concern that the stock market, which has been soaring to record highs, could get thrown into reverse if investors begin to worry about rising interest rates.

Powell is a proponent of financial deregulation but has suggested he supports numerous provisions codified in the Dodd-Frank Wall Street Consumer Protection Act of 2010.

"[Powell] has served as a steady voice and a thoughtful leader" at the Fed, said Senate Majority Leader Mitch McConnell in a floor statement before bringing Powell's confirmation up for a vote. Before joining the Fed, Powell was a visiting scholar at the Bipartisan Policy Center.

As NPR's John Ydstie reported last November when Trump tapped Powell, it was "the first time in decades that a president hasn't reappointed a chief of the central bank for a second term".

But the tax cut could also force the Fed to raise rates faster if it stimulates the economy further. From 1997 through 2005, Mr. Powell was a partner at The Carlyle Group.

A Princeton University graduate, Powell was a lawyer in NY before he joined the investment bank Dillon Reed & Co.in 1984.

Powell was an undersecretary of the Treasury under former President George H.W. Bush.