The U.S. Senate is expected to give the nod to the nomination of Jerome Powell, the new Chairman of the Federal reserve system (FRS). The new head of the world’s largest Central Bank will formally take his seat on February 3, after completing four years of work in this post, Janet Yellen. From new appointee trump do not expect drastic steps aimed at immediate strengthening of the dollar — and that could play into the hands of the ruble.
Candidate 64-year-old Jerome (or as it is called in America – Jay) Powell, who since 2012 member of the Board of governors of the Federal reserve, Donald trump has put forward in November 2017. “Powell has the wisdom and leadership qualities to control the economy and to carry it through any challenges”, – said trump.
And I must say that unlike many other staffing solutions to the trump, it wasn’t a criticism of the senators. Candidate Powell got support from the Republicans, and Democrats: the results of the voting in the Senate, he received 85 votes in favor and only 12 against.
The new chief banker of America grew up in Washington, in a family lawyer. And he, surprisingly, education is not a financier, lawyer: he graduated from Princeton and law school of Georgetown University. By conviction a Republican. Married, father of three children. A lover of Golf and tennis. Used to come to work by bike. Made a successful career both in politics and in business. In particular, rose to the level of partner in a major investment Bank Carlyle Group, thanks to which today is considered one of the richest leaders of the Federal reserve: his personal fortune is estimated at several tens of millions of dollars.
Powell, in contrast to his predecessors over the last 40 years, no doctoral degrees in Economics. However, he is the author of a study on the potential impact of excessive delays in raising the debt limit, U.S. interest rates and the economy as a whole. This study in 2011 drew the attention of President Barack Obama, who at the time fought with Congress over raising the upper limit of the national debt.
With regard to the future actions of the new head of the fed, few are expecting his quick and sharp moves in the financial sector. It is expected that Powell, who in recent years was a reliable ally of Yellen, will continue the policy careful cancellation of the stimulus measures introduced during the recent crisis: that is, will be slow to raise interest rates and reduce the balance of the Federal reserve.
It is significant that the last five years, Powell has always voted the same way as the majority of the members of the Board of governors of the Federal reserve. In fact, for the leadership of the Federal reserve – it is a common practice, but now a number of critics accuses Powell in the absence of his own position. Many investors and analysts believe that j – man is too ordinary, to significantly change the current course of monetary policy in the U.S., writes the Wall Street Journal. Although, the newspaper notes, the continuity in the fed”s policy is a positive signal for market participants. In addition, in recent years, Powell was focused on the job at the fed, so he is familiar not only with its General subject, but also well versed in the inner workings of the U. S. Central Bank.
According to senior analyst “Alpari” Roman Tkachuk, Jerome Powell will have a difficult job — he needs to smooth out the angles between Donald trump and the fed, which, under Yellen, has repeatedly been criticized by the White House. But Powell has established himself as a skilled negotiator, who is fully able to achieve any compromise.
In General, Russian analysts agree that the monetary policy of the new head of the fed and a possible increase in rates will have a significant impact on the exchange rate, although the fed can somehow affect the moods of investors.
A hypothetical increase in interest rates the Federal reserve, which, albeit in a smooth variant, expect Powell to support the dollar and U.S. debt securities , the effect on the Russian currency will be minimal, the head of the analytical Department of Grand Capital Sergey Kozlovsky. “In General, the decrease in the difference between the interest rates of the Central Bank of Russia and the fed will benefit the ruble,” – says the analyst.