Jay Powell Officially Nominated To Fed Chair By Trump
Jerome (Jay) Powell has been nominated by President Donald Trump as Fed Chair and will replace current Fed Chair Janet Yellen in February 2018. The official announcement came after a reality show style nomination process.
This was fully priced in and there is no real reaction in the US dollar.
Around five candidates were considered, with Gary Cohn and Kevin Warsh falling off in the early stages. It then came down Yellen, Taylor, and Powell. Reports that Yellen is out, came out last week. Trump praised her but said he “wanted to make his mark”. It was down to John Taylor, a clear hawk, and Jerome Powell.
Powell’s first day of the job will be February 3rd. Here is a screenshot from the nomination process:
Powell is a current governor at the Fed and has never dissented. In that sense, he represents continuity, at least regarding monetary policy. While some Republicans preferred Taylor due to ideology, Trump said he is a “low rates guy” and having Powell represents that continuity.
The dollar advanced when reports came that Yellen is out and further advanced when Taylor seemed to have the upper hand. it then retreated when Powell emerged as the pick.
The nomination is for four years and Powell will have another rate hike behind him. Yellen is likely to raise rates in her final meeting with a press conference in December. She will then precede her final meeting in January before Powell makes his maiden presser in March.
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