United States President Donald Trump on Thursday nominated Federal Reserve Governor Jerome Powell as the next head of the US Federal Reserve. Powell, according to Reuters, is a “soft-spoken centrist”.
At the announcement made at the White House, Trump called Powell a smart, committed leader who would work on current chairperson Janet Yellen’s achievements – one of which was steering the economy after it had begun to recover from the financial crisis of 2007-2009. Powell has worked with Yellen for five years.
“If we are to sustain all this progress, our economy requires sound monetary policy and prudent oversight,” Trump said. “We need strong and steady leadership at the US Federal Reserve... He will provide exactly that.”
Trump’s decision not to reappoint Yellen, whose term ends in February, marks a break with the norm of presidents reappointing competent Fed chairs they inherited from their predecessor, Vox reported.
A safe pick
Powell, 64, is seen as a safe pick as he is expected to continue the monetary policy followed by Yellen. He has supported the cautious approach to interest rate hikes that Yellen pursued during her term. The former private-equity executive however favours lax bank regulations unlike Yellen, and is in sync with the generally pro-business, bank-friendly outlook of the White House.
Powell, a Republican, was appointed to the Fed in 2012 by President Barack Obama, and has earned a reputation as a non-ideological and pragmatic policymaker, Bloomberg reported. But Trump told Fox Business Network in an interview last week that he wanted to make his own mark on the central bank. “You like to make your own mark, which is maybe one of the things she [Yellen] has got a little bit against her, but I think she is terrific.”
Trump also considered Stanford University economist John Taylor, former Fed Governor Kevin Warsh, and White House economic adviser Gary Cohn.
Financial magazine Barron’s Asia had earlier said that former Reserve Bank of India Governor Raghuram Rajan would be the ideal choice to head the US central bank.