On the day of his eagerly awaited speech (at 5 pm Italian time) at forum of central bankers a Jackson Hole In the Wyoming, Jerome Powell is preparing to collect the reconfirmation at the top of the Federal Reserve for a second term (elected in 2018 and expiring in February 2022) by enslaving the barrage of the progressive wing of the Democrats led by the sheriff of Wall Street Elizabeth Warren, wing that poorly digest a Powell’s not very aggressive attitude towards the financial regulation of the markets And little attention to the climate.
WHAT IS THE JACKSON HOLE AMERICAN FORUM/ The forum And organized by Federal Reserve of Kansas City from 1978 to Jackson Hole, a valley in the state of Wyoming, famous not only for the symposium but also for its skiing facilities. The meeting brings together – for the second year in virtual anti-pandemic form – central bankers from all over the world (for the ECB there will be Christine Lagarde), members of the Federal Reserve System, representatives of major US financial organizations, academics, journalists and political authorities. Each year the symposium has a theme. This year’s is “Macroeconomic Policy in an Uneven Economy“Or macroeconomic policies in an unbalanced economy. The themes of the last two years were: in 2020 “navigating the next decade, implications for monetary policy” and in 2019 “challenges for monetary policy”. From 2007 to 2012, the “landlord” speech – then it was Ben Bernanke – was always the occasion for important monetary policy announcements. In 2010, in particular, he launched the second quantitative easing, in 2012 the third.
According to reports from the agency Bloomberg which cites some sources close to the dossier, i US President Joe Biden’s economic advisers are considering recommending at number one in the White House confirmation of the Washington central banker at the helm of the Fed for a second term. A reconfirmation that would accompany a ticket with the former Treasury Undersecretary for International Affairs in the Obama administration Lael Brainard instead indicated at vice presidency of the Fed.
The 59-year-old “dove” in the management of monetary policy was Brainard considered a potential candidate alternative to the top seat of the US central bank for the support of the left Dem. Support that the economist with a PhD at Harvard does not despise. In fact, the combination would be able to satisfy the progressives of the donkey party skeptical of Powell.
The current president of the Fed enjoys the support of a good chunk of liberal and Republicans, in addition to that of the Secretary of the Treasury, Janet Yellen his predecessor at the head of the institute and that Donald Trump he replaced in 2018 after targeting her multiple times with scarce fair play institutional during his second term.
Biden has not yet dissolved reservations and a decision is expected in the fall. According to some sources, however, the question could arrive on the desk of the Oval Office already in early September.
After the Warren attacks last week, again according to what she reported Bloomberg, Powell had received the viaticum for a second term (And it is customary for the White House to confirm the president of the Fed) by the Secretary of the Treasury, an economist who was very much listened to by Biden and the Republican senator Steve Daines, member of the Senate Banking Committee. Through a letter addressed to the American president, Daines had hoped that the leadership of the Fed remain the same for the next four years for consolidate the trust gained.
Powell won one on the field great credibility bipartisan And international both for driving the Federal Reserve towards a paradigm shift that has placed greater emphasis on reducing unemployment both for having packaged an effective response to the coronavirus pandemic, thanks to the timely intervention in the spring of 2020, when it has drastically lowered interest rates and started a massive securities purchase program for a total of 120 billion dollars which averted a collapse of the financial markets.
Now, while the “hawks” James Bullard, Esther George and Robert Kaplan, respectively presidents of the Fed of St. Louis, Kansas City and Dallas, they press him to get the “tapering“, By slowing down the pace of monthly purchases of government bonds to avoid undesirable effects on the American economy, Powell is preparing to lift the veil on its monetary policy strategy before the meeting of Fomc of 22 September. Words that will be carefully weighed by the financial markets but which will be spoken with a reconfirmation now in your pocket. Not hostage, therefore, to any pressures related to the maneuvers for appointments.