Trump Picks Federal Reserve Insider Jerome Powell To Be Its Chairman : The Two-Way President Trump has named Federal Reserve Gov. Jerome Powell to head the U.S. central bank. If confirmed by the Senate he will succeed Janet Yellen, the first woman to serve in the Fed's top post.
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Trump Picks Federal Reserve Insider Jerome Powell To Be Its Chairman

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Trump Picks Federal Reserve Insider Jerome Powell To Be Its Chairman

Trump Picks Federal Reserve Insider Jerome Powell To Be Its Chairman

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ARI SHAPIRO, HOST:

Today President Trump nominated Jerome Powell to lead the Federal Reserve. The president said Powell will provide the leadership needed to sustain the country's economic progress.

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PRESIDENT DONALD TRUMP: He will provide exactly that type of leadership. He's strong. He's committed. He's smart.

SHAPIRO: If confirmed by the Senate, which is widely expected, Powell will replace Janet Yellen. Her four-year term as chair of the Fed ends early next year. NPR's John Ydstie joins us now to discuss Powell and how he might affect Fed policy and the economy. Hi there, John.

JOHN YDSTIE, BYLINE: Hi, Ari.

SHAPIRO: So first tell us about who is this guy.

YDSTIE: Well, Powell is a current governor of the Federal Reserve - so someone who has sat at the policymaking table with Yellen during her time as chair. And here's what he had to say today after President Trump announced his nomination.

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JEROME POWELL: I'm both honored and humbled by this opportunity to serve our great country. If I am confirmed by the Senate, I will do everything within my power to achieve our congressionally assigned goals of stable prices and maximum employment.

YDSTIE: Powell is a Republican but was appointed by Barack Obama and has served on the Board of Governors since 2012. He's not a Ph.D. economist like recent Fed chairs. Powell was trained as a lawyer. Then he went to Wall Street and became an investment banker. He also served as undersecretary of the Treasury during the George H.W. Bush administration. He stayed in Washington - in the Washington area after that, where he was - he was actually born and raised here and became a partner in the very successful private equity firm the Carlyle Group. So he knows Washington.

SHAPIRO: It's a very important job. The Fed has the ability to adjust interest rates. That can affect economic growth, jobs. What is your sense? Is Powell likely to shake things up or keep the Fed on a steady course?

YDSTIE: I think he will keep Federal Reserve policy on its current course. He has voted with Yellen on every major monetary policy decision facing the Fed. He's clearly in favor of the gradual approach to raising interest rates and not convinced by some Republicans who've wanted faster rate hikes to avoid inflation. Here he is addressing those critics at the Economic Club of New York back in June.

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POWELL: The problems that some commentators predicted have not come to pass. Accommodative policy did not generate high inflation or excessive credit growth. Rather, it helped restore full employment and return inflation closer to the 2 percent goal.

YDSTIE: And he's clearly got that monotone Fed thing down.

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SHAPIRO: Delivering crucial information in a way that might put some people to sleep, you're saying.

YDSTIE: Exactly.

SHAPIRO: Another important thing the Fed does is regulate the big banks. President Trump has talked about rolling back the major Dodd-Frank overhaul. Those regulations came after the financial crisis. Is Powell onboard for that plan?

YDSTIE: No, I don't think so - maybe some adjustments but not a major rollback. In an interview with CNBC back in June, Powell said that the post-crisis reform program has been mostly successful. And then he added this.

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POWELL: It's our obligation now to look back over it and ask, what aspects of it may be redundant or inefficient or utterly essential and should be protected down to every letter? But there are going to be some adjustments, and I think that's only appropriate.

SHAPIRO: So it sounds like the takeaway here is, though there may be a change in leadership - continuity in approach.

YDSTIE: Absolutely - continuity at the leadership level. But over the next year, Trump will have the opportunity to name several other Fed officials. And that could spark changes.

SHAPIRO: NPR's John Ydstie, thanks a lot.

YDSTIE: You're welcome.

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