Donald Trump has confirmed that Jerome Powell is his pick to replace Janet Yellen as the head of the Federal Reserve starting February 2017. It is the most important appointment in terms of economic policy, since the beginning of the Trump administration.
The position is, basically, that of the presidency of the world’s most powerful central bank.
Powell, who is 64 years old, will be the first investment banker to head the Fed in the history of the United States. A graduate of Princetown, he has dedicated his entire life to finance. In the ’90s he was an official of the Bush administration. Powell is currently part of the council of governors – Barack Obama appointed him for the position in 2012, so changes are not expected to be radical. Powell and Jenet know each other very well, and sometimes work together.
Powell is in favor of maintaining a strategy of gradual removal of the stimulus. President Trump says he wants interest rates to remain low. The Powell choice to lead the Federal Reserve is also in favor of relaxing everything related to financial regulations.
For Powell to assume his position, the decision must be approved by the United States Senate. Powell’s election confirms the close relationship that exist today between Wall Street and the Fed.
In this way, Trump breaks with the tradition of preserving the president of the Fed elected by the previous president, in addition to choosing a candidate who hasn’t been trained as an economist. The last time this happened was 40 years ago. The president of the United States has a unique opportunity to manage the direction of the Federal Reserve at his whim.
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