Meet the most new most powerful man in economics: Jerome Powell the new head of Federal Reserve

Jasper Jolly
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Jerome Powell has served on the FOMC since May 2012

Federal Reserve governor Jerome Powell will take the step up to the most powerful position in economics, after US President Donald Trump nominated him today, breaking with precedent.

Powell will replace Janet Yellen, the current chair appointed by Barack Obama whose term ends on 3 February 2018.

While the post of chair of the Federal Reserve must be confirmed by the Senate, Powell would likely face little opposition.

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During his time in the rate-setting Federal Open Market Committee (FOMC), starting in May 2012, Powell has never dissented on policy, and his views have been firmly in line with consensus.

Seth Carpenter, US chief economist at UBS, said: “He is well liked and well respected on the Committee and understands the processes of the FOMC, as well. That combination means that he should be able to create consensus within the Committee fairly easily.”

While not a trained economist, Powell has had extensive experience in markets as an investor, lawyer and a regulator.

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Powell is a former partner of the Carlyle Group, a private equity giant, where he worked from 1997 until 2005. He was previously an undersecretary of the Treasury for President George HW Bush and has been a lawyer and investment banker in New York.

Powell is the “continuity candidate” with a more centrist stance than other hawkish contenders such as Kevin Warsh, according to Oliver Jones, markets economist at Capital Economics.

While the direction of monetary policy will likely remain mostly unchanged under Powell, he may favour deregulation for smaller financial institutions, according to Marie Owens Thomsen, chief economist at Indosuez.

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