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UPDATE: Trump Names Powell As First Non-Economist Fed Chair Since 1979

WASHINGTON (Alliance News) - Current Federal Reserve board member Jerome Powell was named ...

Alliance News 3 November, 2017 | 6:48AM
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WASHINGTON (Alliance News) - Current Federal Reserve board member Jerome Powell was named Thursday by US President Donald Trump as the future chairman of the organization from February, pending Senate confirmation.

The pick comes as the country's central bank continues to unwind its unprecedented efforts to stimulate the economy since the 2008 financial crisis.

"He's strong. He's committed. He's smart," Trump said in a White House Rose Garden event introducing Powell.

Current Fed Chairwoman Janet Yellen's four-year term expires on February 3.

Powell, a lawyer by training, a former investment banker and a member of the Fed since 2012, would be the first non-economist to lead the central bank since 1979.

The 64-year-old said he would emphasize the Fed's political independence in forging monetary policy and overseeing the banking system.

"Inside the Federal Reserve, we understand that monetary policy decisions matter for American families and communities," Powell said. "I strongly share that sense of mission, and I'm committed to making decisions with objectivity, based on the best available evidence, in the long-standing tradition of monetary policy independence."

He said that the US economy has made "substantial progress toward full recovery" since the 2007-09 recession, and the financial system is "far stronger and more resilient" than a decade ago.

Powell participated in Wednesday's Fed decision to leave the benchmark interest rate unchanged in a target range of 1 to 1.25%.

In a statement, the Fed noted that core inflation - excluding volatile food and energy prices - "remained soft."

Yellen, the first woman to lead the Fed, has overseen a very gradual withdrawal of extraordinary monetary policies implemented in the years after the 2007-09 US recession.

Last month, the Fed began trimming its record USD4.5 trillion bond holdings, piled up since 2008 in a bid to force investment into the private sector.

As he has since taking office in January, Trump touted the US economy's recent performance, noting last week's report showing gross domestic product growing at an annual pace of more than 3% in the last six months.

"But if we are to sustain all of this tremendous economic progress, our economy requires sound monetary policy and prudent oversight of our banking system," he said.

"That is why we need strong, sound and steady leadership at the US Federal Reserve."

Trump called Powell a "consensus builder" with the "wisdom and leadership to guide our economy through any challenges," and called for swift Senate confirmation.

Trump's Republicans hold 52 seats in the 100-member upper chamber.

Yellen is the first Fed chief since William Miller (1978-79), who left the Fed to become president Jimmy Carter's Treasury secretary, not to serve two terms.

Chuck Schumer, leader of the opposition Democrats in the Senate, called it "hard to understand" why she was not given a second term.

"In my view, her sure hand, and the steady growth and low inflation over her tenure, certainly warranted a reappointment," he said.

Schumer urged Powell to assure senators of a commitment "to following Chair Yellen's example" in monetary policy and banking regulation.

The White House had confirmed Yellen on a short list of candidates considered by the Republican Trump.

She vowed to finish her term when Trump took office but never publicly stated if she was interested in four more years at the helm, though she did meet with the president last month.

Federal Reserve governors are appointed to staggered 14-year terms, while the chair serves a four-year term that is not concurrent with presidential administrations.

Powell, a Republican, joined the Board of Governors of the Federal Reserve System in 2012, filling an unexpired term, and was reappointed to a 14-year Fed term in 2014 by then-president Barack Obama, a Democrat.

Yellen, who joined the board of governors in 2010, can remain on the Fed board until 2024.

Trump called her "absolutely a spectacular person" who did a "terrific job" as Fed chief.

Yellen issued a statement congratulating Powell, praising his "dedicated public service and seriousness of purpose," and vowing a smooth transition.

US financial markets showed little reaction to Powell's nomination, which had been expected for days.

Copyright dpa

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