by admin | May 25, 2021 | World
Jerome Powell
Washington : Jerome Powell, US President Donald Trump’s nominee to lead the Federal Reserve, said he expected the central bank to continue monetary tightening and to ease regulatory burdens on financial system.
“If confirmed, I would strive, along with my colleagues, to support the economy’s continued progress toward full recovery,” said Powell in remarks to be delivered at his Senate confirmation hearing on Tuesday, Xinhua reported.
“We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink,” Powell said in the remarks which were released on Monday before his hearing.
He also noted that the central bank should be prepared to respond decisively in response to crisis.
In regard to regulatory reforms, Powell said the central bank under his leadership will consider appropriate ways to ease regulatory burdens on the financial system while preserving core reforms, such as strong capital and liquidity requirements, stress testing and resolution planning.
In his remarks, he also stressed the independence of the Fed. “I will do everything in my power to achieve those goals (maximum employment and price stability) while preserving the Federal Reserve’s independent and nonpartisan status that is so vital to their pursuit,” said Powell.
Powell, who is currently a member of the Fed’s Board of Governors, was nominated by Trump to replace chair Janet Yellen, whose term as chair expires in February 2018. He is expected to face smooth confirmation at the Senate.
—IANS
by admin | May 25, 2021 | World
Janet Yellen
San Francisco : Federal Reserve Chair Janet Yellen announced Monday she will resign from the central bank once her term ends in February.
Last month, President Donald Trump said he would not nominate Yellen for a second term as chair of the Fed, breaking with decades of tradition. Instead, he nominated Jerome “Jay” Powell as chair, a Republican on the Fed’s board of directors who has voiced an economic philosophy similar to Yellen’s.
The Senate is scheduled to hold a confirmation hearing for Powell next week.
Once Yellen’s term is up in several months, she could have returned to her seat on the board of directors – her term as a governor ends in 2024.
Yellen, the first woman to serve as chair, oversaw a critical moment in American economic history as the country slowly recovered from the devastating financial crisis in 2008. In her resignation letter to Trump, she noted that a net of 17 million jobs have been created over the last eight years. She also mentioned that the economy is on track to reach the Fed’s definition of maximum employment and price stability.
“As I prepare to leave the Board, I am gratified that the financial system is much stronger than a decade ago, better able to withstand future bouts of instability and continue supporting the economic aspirations of American families and businesses,” she wrote in the letter. “I am also gratified by the substantial improvement in the economy since the crisis.”
After the departure of Yellen, who joined the Fed’s board in 2010 as vice chair, there will be four vacancies on the board for Trump to fill. The only remaining board member nominated by former President Barack Obama will be Lael Brainard. The Senate confirmed Trump nominee Randal Quarles to the board earlier this year, but the White House has not nominated any candidates to fill the three other open seats, soon to become four.
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by admin | May 25, 2021 | World
Donald Trump and Jerome Powell
Washington : Announcing Jerome Powell’s appointment as chairman of the Federal Reserve, US President Donald Trump expressed confidence and said the former has the “wisdom and leadership to guide our economy”.
“Based on his record I am confident that Jay has the wisdom and leadership to guide our economy,” Efe news quoted Trump as saying in the White House Rose Garden.
He emphasized that Powell “has proved to be a consensus builder for the sound monetary and financial policy that he believes in”.
Powell, who will succeed Janet Yellen, said he was “honoured” to be nominated to head the Fed.
The President also thanked Yellen for the “dedication and devotion” she has displayed in her four years in the post, calling her a “spectacular person”.
The nomination of Powell, a member of the Fed Board of Governors since 2012, is not likely to face any serious opposition in the Senate.
Trum had during his campaign said that he would fire Yellen if he were elected, although after he met her he said he liked her.
—IANS
by admin | May 25, 2021 | World
Washington:(IANS) Most US Federal Reserve officials believe conditions for tightening monetary policy were approaching but failed to give clear signals on the timing of the first interest rate hike in nearly nine years.
“Most (Fed officials) judged that the conditions for policy firming had not yet been achieved but they noted that conditions were approaching that point,” according to the minutes of the Fed’ s monetary policy meeting on July 28 and 29 which are published on Wednesday, Xinhua reported.
The minutes left mixed signals on whether the Fed officials decide to raise the interest rate on next monetary policy meeting in September or not. Many Fed officials, including the Fed chairwoman Janet Yellen, has repeated that it’s appropriate to raise the benchmark interest rate this year. Market investors widely see September or even later as the most likely time for a Fed rate increase.
Some officials worried that the current low inflation and the inflation outlook might not meet the central bank’s one of the conditions for initiating a policy tightening and a premature tightening could further put downward pressure on the inflation and economic activity.
The Fed considers price stability and full employment as its dual mandate in managing the monetary policy. The Fed’s preferred inflation gauge, the price index for personal consumption expenditures, has been below the central bank’s 2 percent objective for years.
However, some officials viewed the economic conditions for beginning to raise interest rate as having been met or were confident that they would be met shortly, as they believe that the stance of monetary policy was very accommodative and a delayed rate hike could overshoot the central bank’s inflation target and have adverse impact on financial stability.
“Members generally agreed that additional information on the outlook would be necessary before deciding to implement an increase in the target range,” said the minutes. The Fed has kept its benchmark short-term interest rate near zero since December 2008.
