Powell Appointment to Fed Chair Overshadows FOMC
fxU.S. President Donald Trump will tap Jerome Powell as next Chairman of the Federal Reserve, according to The Wall Street Journal.
Powell to Head the Fed
Federal Reserve Governor Jerome Powell will receive the nomination for Chair on Thursday, WSJ has learned. President Trump spoke with Powell on Tuesday and informed the governor of the decision. Sources familiar with the matter say the president made up his mind on Powell as early as Saturday.
President Trump said in a video last week he had somebody “very specific in mind” for the nomination, someone who “hopefully will do a fantastic job.”
Powell was one of a handful of people President Trump nominated for the position. Former central bank governor Kevin Warsh, Stanford economist John Taylor and current Fed Chair Janet Yellen were all considered for the job.
Powell’s outlook on the economy and monetary policy is similar to Yellen’s, although he is considered less dovish than the current Fed Chair.
FOMC Stands Down
The Federal Open Market Committee (FOMC) made no changes to monetary policy on Wednesday in a decision that was widely anticipated by markets. The central bank’s official policy decision maintained positive language on the economy, leaving the door open to a December rate hike.
Traders believe it’s all but a given that the Fed will hike in December. CME Group’s 30-day Fed Fund futures prices imply a nearly 100% probability of liftoff next month.
The U.S. economy has gathered steam in recent quarters, growing at the fastest rate in two years. Gross domestic product (GDP) expanded at an annualized 3% from July through September, overcoming deadly hurricanes in the Gulf of Mexico and Atlantic. Hurricanes Harvey and Irma inflicted a combined $150 to $200 billion in damages, according to Moody’s Analytics.
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