Saturday, October 16, 2021

Four More Years for Powell on Wall Street Eyes Fed

Federal Reserve Chairman Jerome Powell favors reelection by the White House, and if recent history repeats itself the decision could come any time before a re-meeting of the central bank in early November.

Wall Street expects Powell, who was nominated for the role by President Donald Trump in 2017 and confirmed by the Senate, will be re-nominated by President Joe Biden for a four-year term.

“I think the market will love it because it’s a continuation and they’ve become comfortable with that, that’s a known volume,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “In general, I think the Street has a positive outlook.”

The political betting website shows Predictit Powell with a nearly 84 percent chance of being re-confirmed by the Senate, down from 90 percent on September 12, but roughly even his chances in July. The site showed that Fed Governor Lyle Brainard’s chances were about 15 percent.

Four More Years for Powell on Wall Street Eyes Fed

Powell replaced Janet Yellen as chair of the Fed’s board of governors in February 2018 and propelled the economy through its worst crisis since World War Two, battered by the COVID-19 pandemic that began early last year. Had to give

The US stock market has rallied during Powell’s tenure, driven by measures by the US central bank to protect the economy from the coronavirus pandemic.

Under Powell, the S&P 500 has risen nearly 60 percent, in line with the index’s gains during Yellen’s four years in charge of the Fed, when Wall Street marked its recovery from the 2008 financial crisis in a nearly decade-long bull market. Extended.

The S&P 500 rose 39 percent during Ben Bernanke’s eight-year tenure as of January 2014.

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Four More Years for Powell on Wall Street Eyes FedAccording to people familiar with the matter, the Biden administration is actively discussing a decision about the next Fed chair, although White House Press Secretary Jen Psaki has declined to comment on the president’s timeline in recent days. . The nominations between the last Fed meeting and the one in November will coincide with a point in the calendar when the last two Fed chairman appointments have been announced.

Biden’s decision comes at a turning point for the central bank. Following Powell’s guidance after the central bank’s most recent meeting on Wednesday, with US stock markets hitting record highs, investors expect the Fed to begin easing its bond buying program in November.

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Four More Years for Powell on Wall Street Eyes Fed

Many investors were also surprised by a sharp tilt by the central bank on future rate hikes, with nine out of 18 US central bank policymakers needing to raise the cost of borrowing in 2022.

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Four More Years for Powell on Wall Street Eyes Fed

Progressive Democrats want the Fed to play a more detailed role in the economy by ramping up efforts to boost employment, address climate risk and address inequality. Others want the Fed to stick to its monetary policy lane, focus more on fighting inflation and reduce its footprint on the financial markets and oversight front.

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Four More Years for Powell on Wall Street Eyes Fed

Powell’s focus on jobs has drawn praise from the Biden administration and the wider community of Democratic policy analysts. A private equity lawyer, Powell has also won support for a second term from some congressional Republicans.

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Four More Years for Powell on Wall Street Eyes Fed

by Noel Randwich

Reuters

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This News Originally From – The Epoch Times

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