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What to expect from the change of Fed chair
Thus, the change to Powell as the new Fed chair is good news for emerging economies, including Indonesia.
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Federal Reserve building. (Shutterstock/File)
J
ust before leaving for his trip to Asia, United States President Donald Trump made an announcement nominating governor Jerome Powell as his candidate to replace Professor Janet Yellen as chair of the Federal Reserve Bank of the United States (Fed), whose term ends in February 2018.
At the start of the Trump administration it was almost certain that Yellen would not be reappointed to serve a second term, as Trump kept criticizing Yellen’s policy of raising the prime rates.
But, his criticism disappeared months into the presidency, when he recognized that the Fed had raised prime rates to his liking, i.e. at a slow pace.
Regarding who will replace her as the new chair, most would previously have mentioned Gary Cohn, who joined the Trump administration as an economic advisor and director of the National Economic Council.
In President Trump’s plan to change the Washington establishment, Cohn, a former investment banker and CEO of Goldman Sachs, was considered to be the perfect candidate to run the Fed.
However, after the Charlottesville incident it was rumored that Cohn had started to fall out of favor with the President, due to his complaint against Trump’s antisemitic statements.
His name as forerunner was replaced by Kevin Warsh who, aside from being a former Fed governor, has a strong connection to Trump through his wife, who is the daughter of Trump’s business friend Ronald Lauder and heir to Estée Lauder.
