Wall Street eyes four more years for Powell at Fed

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Nomination of president by White House rests in favor with decision any time before November central bank meeting: report

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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 in 2017 by President Donald Trump, to be re-nominated by President Joe Biden for a four-year term.

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“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 outlook is positive.”

Fed officials see ‘transitory’ inflation persist for a long time

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

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, prompted by extraordinary measures by the US central bank to protect the economy from the coronavirus pandemic.

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

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

Fed to change trading rules for central bank officials, says Jerome Powell

According 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.

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

Progressive Democrats want the Fed to play a more comprehensive role in the economy, ramping up efforts to increase 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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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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