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.
—AA
by admin | May 25, 2021 | World
Janet Yellen
Washington : The US Federal Reserve has left its benchmark interest rates unchanged amid speculation about President Donald Trump’s appointment of next Fed Chair.
The US labor market “has continued to strengthen” and economic activity “has been rising at a solid rate” despite hurricane-related disruptions, the Fed’s policy-making committee said in a statement released on Wednesday, after its two-day meeting, Xinhua news agency reported.
Citing past experiences, the central bank said the hurricanes, which hit the Gulf Coast in late August and September, are “unlikely to materially alter the course of the national economy over the medium term.”
The US economy grew at an annual rate of 3 per cent in the third quarter of the year, slightly lower than the 3.1 percent in the previous quarter, the Commerce Department reported last week.
In view of realized and expected labor market conditions and inflation, the central bank decided to maintain its target range for the federal funds rate at 1 to 1.25 per cent.
The Fed’s decision comes one day before Trump plans to announce his pick for the next leader of the central bank.
“I’ll be announcing tomorrow the new head of the Federal Reserve… I think you’ll be extremely impressed by this person,” Trump said on Wednesday at the Cabinet meeting.
Trump has recently finished interviews of five candidates for the next Fed Chair, including current Fed governor Jerome Powell, Stanford University economist John Taylor, former Fed governor Kevin Warsh, White House National Economic Council Director Gary Cohn and current Fed Chair Janet Yellen, whose term expires next February.
Multiple US media outlets reported Trump is most likely to nominate Powell, a Republican and former US Treasury official, for the post.
If Trump does nominate him, Powell is likely to continue Yellen’s gradual and cautious approach to tightening monetary policy.
“If Trump nominates Powell to replace Yellen it will imply continuity in the Federal Reserve’s interest rate and the balance sheet policy, at least for a time,” said Lewis Alexander, US chief economist at Nomura.
—IANS
