Fed nominee Powell, once hawkish, champions Yellen’s focus on jobs
WASHINGTON/SAN FRANCISCO: As a nominee to lead the Federal Reserve, veteran governor Jerome Powell sides with outgoing chair Janet Yellen in arguing that the Fed's easy money policy has paid off by bringing millions back to work without any clear sign it has thrown markets off kilter.
In remarks released ahead of his hearing by the Senate Banking Committee, Mr Powell said the Fed needed the capacity "to respond decisively and with appropriate force" to new threats to the economy.
In the past, however, he has been more cautious about the risks posed by such an expansive approach.
As the 64-year-old prepares to lead the Fed himself, former colleagues, associates and former Fed staff say the key unanswered question is whether his evolution represents a change of heart or the outgoing chair's imprint on the current debate.
Mr Powell will inherit a strong economy, low inflation and a clear near-term policy path set by Ms Yellen.
What is not clear is how he would respond to another recessionary shock.
While there is no immediate policy challenge for Powell to tackle, the Fed is trying to get a handle on the US economy's ability to grow without stoking inflation, and whether low long-term bond yields signal investors are losing faith in the recovery.
US President Donald Trump's tax and spending plans could also present a risk if they spurred higher inflation.
Any Fed policy tightening in response could mean a clash with Mr Trump, who picked Mr Powell, initially considered a long-shot for the job, out of a group of five finalists that included Ms Yellen.- REUTERS
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