Monetary policy US Federal Reserve Chairman Jerome Powell to continue for second term, President Joe Biden announces appointment on Monday

Lael Brainard was appointed Vice Chairman of the Board.

Of the United States president Joe Biden appointed on Monday Jerome Powellin for the second term as Governor of the Central Bank, ie Chairman of the Executive Board.

President Biden was appointed Vice Chairman of the Board Lael Brainardinwho is a Democrat, while Powell is a Republican.

President Barack Obama appointed Powell a member of the Executive Board of the Central Bank in 2012. In 2017, President Donald Trump appointed Powell CEO. He took up his new position in February 2018.

“I am confident that CEO Powell and Dr. Brainard will focus on curbing inflation, price stability and full employment to make our economy stronger than ever before,” President Biden said in a statement.

Brainard holds a PhD in Economics from a top university in Harvard. He has been a member of the Executive Board of the Central Bank since 2014. Prior to that, he worked as Undersecretary of State in the Ministry of Finance from 2010 to 2013.

“They also agree with me that urgent action is needed to address the economic risks posed by climate change and to prevent new risks to our financial system,” the president said.

Central Bank the term of office of the Executive Director shall be four years. The director general is appointed by the president, but it requires the approval of the upper house of Congress, the Senate.

The monetary policy of the central bank is decided by an open market committee, each of which has one vote. However, the President and CEO has more influence over monetary policy decisions.

The members of the Open Market Committee are always members of the seven Executive Boards of the Central Bank and the Governor of the Regional Bank of New York.

In addition, the directors of the four regional central banks for one-year terms are rotating members. There are a total of 12 regional central banks.

Open Market Committee decide on monetary policy independently on the basis of its competence.

Central banks independence there has been a desire to prevent politicians from unnecessarily interfering in monetary policy, as there are numerous warning examples of this in the past.

President Trump criticized both Powell and his predecessor exceptionally colorfully and harshly Janet Yellen decisions of the Open Market Committee. Yellen is currently the United States Secretary of the Treasury.

“The solid leadership of Governor Powell and the central bank helped ensure that the U.S. economy recovered from the once-a-generation health and economic crisis,” Yelle said in a statement.

The Open Market Committee decided in early November by unanimitythat purchases will be cut by $ 15 billion a month as the economy recovers strongly, employment improves and inflation picks up.

According to the US Federal Reserve’s price stability target, inflation should average 2% over the long term. In October, it accelerated to 6.2 percent.

The market estimates that the central bank will raise its key interest rate next summer. The key interest rate is currently in the range of 0-0.25%.

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