With the appointment of the next Fed Chairman imminent, the WSJ investigated whether knowing his/her identity and policy stance would have led to successful investment decisions. Spoiler alert – it’s often paid to do the opposite.
According to The Wall Street Journal, President Trump has picked Jerome Powell to be the next Federal Reserve Chair.
The White House has notified Federal Reserve governor Jerome Powell that President Donald Trump intends to nominate him as the next chairman of the central bank, according to a person familiar with the matter.
The president spoke with Mr. Powell on Tuesday, according to another person familiar with the matter who couldn’t describe what they discussed.
As we previewed earlier this morning, today's FOMC announcement will most likely be a snooze-fest, with consensus expecting the Fed to leave its target range for the federal funds rate unchanged at 1.00-1.25% as it continues to evaluate to what degree recent disinflation is temporary or persistent.
Authored by Tho Bishop via The Mises Institute,
In the end Donald Trump will get what he wanted, a “low interest rate person” who also happened to be a “Republican.”
Jerome Powell is expected to replace Janet Yellen in an announcement later this week. If so, this means Trump will ensure that, while the stationary at the Eccles Building will change, the monetary policy guiding it likely will not.
In our preview of today's FOMC, we said there is virtually no way the Fed could surprise on the hawkish side, especially with Trump set to unveil Jay Powell as the new head of the Fed: after all, the December rate hike is over 80% priced in at this point. But what about the opposite - can the Fed surprise on the dovish side? That, according to Bloomberg macro commentator and former Lehman trader Mark Cudmore is the biggest risk today. As he writes, "growth is solid, but not spectacular. It would be a brave stretch for the committee to upgrade its outlook.