Trump’s stamp on the Fed

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President Trump “broke precedent” when he nominated Jerome Powell last week to be the next chair of the Federal Reserve, said Ana Swanson and Binyamin Appelbaum at The New York Times. For nearly four decades, chiefs of the U.S. central bank have all been reappointed to second four-year terms, even by presidents of the opposite party. But after weeks of deliberation, Trump bypassed current Chair Janet Yellen, who was nominated by President Obama in 2013, in favor of Powell, a centrist Republican with ties to the party’s establishment. “A lawyer by training and investment banker by trade,” Powell has served since 2012 on the Fed Board of Governors, where he has “consistently voted with Yellen to slowly raise interest rates and sell off assets that the Fed bought up” after the financial crisis. “Trump infused the search with suspense and showmanship seldom seen in the normally staid business of picking a central bank leader,” said Peter Nicholas at The Wall Street Journal. He teased the announcement in an Instagram video and cast a wide net for advice, consulting a TV personality, a casino magnate, and GOP lawmakers. His economic adviser Gary Cohn was briefly considered for the job, while Vice President Mike Pence lobbied for conservative economist John Taylor. Cohn himself made a last-minute case for Yellen. But Trump ultimately settled on the “conventional” Powell.

It’s “indefensible” that Trump didn’t reappoint Yellen, said Matt O’Brien at The Washington Post. Sure, Powell is a solid choice: He’s got experience in both Washington and on Wall Street and has made smart decisions in his five years on the Fed board. But Yellen “couldn’t have been better” at her job, with unemployment at a 17-year low and inflation at just 1.6 percent. “Those are fantasy numbers for a central banker.” It’s hard to overlook the fact that Trump is “replacing the most powerful woman in America with a less qualified man,” said Jordan Weissmann at Slate. The 64-year-old Powell will be the first Fed chair without an economics Ph.D. since Alan Greenspan took the job in 1987. In a world where women in positions of authority face constant scrutiny about how they made their way to the top, it is worth noting that Powell’s “chief qualification is agreeing with the …read more

Source:: The Week – Politics


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