Donald Trump´s nominee to lead the Federal Reserve, Jerome Powell (64), sides with the outgoing chair Janet Yellen. According to his view, stimulus and easy Money has paid off. In remarks released ahead of his hearing by the Senate Banking Committee which is due on Tuesday, Powell said the Fed needed the capacity “to respond decisively and with appropriate force” to new threats to the economy, Reuters reported.
However, Powell is known for his hawkish stance on monetary policy. In his first months at the Fed, Powell was among those who pressured then chair Ben Bernanke for more clarity on when the central bank would start scaling back its bond buying. When Bernanke went on public with his plans, it triggered“taper tantrum” spike in market interest rates in the summer of 2013.
Analysts and former colleagues are wondering whether his change of heart is permanent. Powell inherits a strong economy with low inflation and low unemplyment.
It´s not clear how he would respond to another recession. Would he be a hawk or a dove? Would he by more aggressive as Yellen? Nobody knows.
Globally, it is the norm that top central bankers hold advanced economics degrees or rise through the ranks of the central bank or national finance ministry. Powell, a lawyer by training, served three years at the Treasury in the early 1990s, but spent most of his career in investment banking and private equity, Reuters reported.