In nominating Jerome H. “Jay” Powell to be chairman of the Federal Reserve Board, President Donald Trump has selected a candidate who has said – repeatedly and recently – that the mission and structure of the central bank should be left as is.
Trump reportedly informed Powell, 64, of his intention to nominate Powell to succeed current chair Janet Yellen, whose terms expires in February. Powell is now a member of the Fed board; his term expires in 2028. The Senate must confirm Powell’s nomination.
After a White House Rose Garden introduction Thursday by Trump of his Fed chair candidate, Powell said that if confirmed, he would do everything in his power to achieve the Fed’s congressionally assigned goals of stable prices and maximum employment.
He supported actions taken by the Fed during and since the financial crisis. “Our financial system is without doubt far stronger and more resilient than it was before the crisis. Our banks have much higher capital and liquidity, they are more aware of the risks that they run, and they are better at managing those risks,” he said.
He praised former Chair Ben Bernanke and current Chair Janet Yellen for their leadership and courage, and said that he said he is committed to “making decisions with objectivity based on the best available evidence based in the long-standing tradition of monetary policy independence.”
Powell’s remarks Thursday are in the same vein as those he has made recently in speeches.
In remarks last month, the Fed board chair nominee said that the “best thing” the Federal Reserve can do, for both the U.S. and the global economy at large as a sustainable recovery materializes, is to keep its house in order “in continued pursuit of its dual mandate of maximizing employment and stabilizing prices.”
Speaking to the 2017 Annual Membership Meeting of the Institute of International Finance in Washington, he also pointed out that the Fed’s “policy normalization” is occurring not in isolation, but in the “context of a solid U.S. economic recovery, which should benefit all economies around the world.”
In a March speech, Powell said that the structure of the Federal Reserve should not be changed lightly, as it achieves a practical balance that serves the country well.
“Throughout our history, Americans have questioned the structure and even, at times, the need for a central bank,” Powell said in remarks at the West Virginia University College of Business and Economics in Morgantown. “Current discussions of Fed reforms echo these past debates. But it is important to understand that history in both advanced and emerging economies across the world has consistently demonstrated the need for a central bank, and both the existence and the structure of the Federal Reserve are products of that historical experience.”
Powell also noted that the Fed Board has recently expanded its transparency with frequent public speeches and other communications, and that communications with Congress and the public are critical to the Fed’s institutional accountability and transparency, as well as “essential complements to its independence.”
“I believe that support for the Federal Reserve as a public institution is sustained by the public expression of our diverse views,” he said, reflecting on the structure of the Federal Reserve System, made up of district banks and a central board for oversight. “It is important that Federal Reserve officials regularly demonstrate that the Fed has been appropriately pursuing its mandated goals. Transparency can also make monetary policy more effective by helping to guide the public’s expectations and clarify the (Federal Open Market) Committee’s policy intentions.”
Aside from his service as a Fed board member, Powell also served in the Treasury Department during the administration of President George H.W. Bush in the early 1990s, as assistant secretary for financial institutions, and as undersecretary of domestic finance – both positions that interface with federal financial institution regulatory agencies.
|INFO, BACKGROUND ON JEROME H. 'Jay' POWELL|
|BIRTH DATE||February, 1953|
|POSITION||Chairman, Federal Reserve Board (confirmed by Senate: Jan. 23, 2018)|
|EDUCATION||A.B. (politics), Princeton University (1975)
J.D., Georgetown University (1979); editor-in-chief, Georgetown Law Journal
2012 to present: member, Federal Reserve Board
September, 1990 to January, 1993: Assistant Treasury Secretary, financial institutions; Treasury Undersecretary, domestic finance
1979 to 1990: Dillon, Read & Co. (New York, NY; left for Treasury position as senior vice president)
1997 to 2005: Carlyle Group (partner)
2005-12: Bipartisan Policy Center (visiting scholar), Washington, D.C.