" /> The Swamp Wins: Trump Expected to Nominate Powell to Replace Yellen | bambinoides.com

The Swamp Wins: Trump Expected to Nominate Powell to Replace Yellen

In the end Donald Trump will get what he wanted, a “low interest rate person” who also happened to be a “Republican.” Jerome Powell is expected to replace Janet Yellen in an announcement later this week. If so, this means Trump will ensure that, while the stationary at the Eccles Building will change, the monetary policy guiding it likely will not.

The fact that, in naming Powell, Trump is picking an Obama-appointed Fed Governor for his most important nominations is itself quite fitting. While we have long known that bad monetary policy is bipartisan, Powell’s nomination serves as a particularly useful illustration of how little has changed in Washington since the Bush Administration.

Of course, just as Trump received his loudest applause from Washington for doing his best impersonation of his two predecessors, the President is already being praised for making a “grown up” decision when it comes to the Fed. While his awareness optics likely prevented him from ever truly considering reappointing Janet Yellen –—the preferred choice of the DC and NY — Powell’s nomination ensures that Trump’s scathing criticism of the monetary orthodox has been predictably discarded alongside a number of his most exciting campaign promises.

Now we will see how else Trump squanders his historic opportunity to rearrange the Fed. The administration has signaled that its plans to form a policy consensus with its remaining Fed choices – as opposed to opening FOMC meetings into some truly spirited debate.

This likely means that John Allison, whose resume as head of BB&T during the financial crisis and an admirer of Mises and Hayek made him the best fit for Candidate Trump’s rhetoric, is unlikely to be seriously considered for anything. Of course given the dangerous world the Fed finds itself in, it’s likely for the best that Allison emulates the example of Ludwig von Mises who, when offered a prestigious bank position in the 1929, famously said, “a great crash is coming, and I don’t want my name in any way connected with it.”

Going forward, it will be interesting to see how Republicans in the House and Senate proceed. For years now, House Financial Services Committee Chairman Jeb Hensarling has been pushing Fed reform which would have included requiring the Fed to adopted rule-based monetary policy. While this would have complimented the nomination of John Taylor or Kevin Warsh, Powell has made it clear that he opposes such limits being placed on the Fed.

Going forward, we should expect to see the Fed continue its tediously slow normalization of its balance sheet – what George Selgin has cleverly dubbed Operation SNAIL. Whether the Fed continues with its projected interest rate hike in December may itself depend on Congress. The legislature’s knack for kicking the budgetary can down the road as led to yet another “fiscal cliff” scenario at the end of the year. While we can be ensured that outcome will be more spending (and more debt), the bout of yet another round of arbitrary drama may give the Fed enough of an excuse to follow their lead and hold off until 2018.

 

 


  | Mises Institute


The views expressed are not necessarily those of the publisher or bambinoides.com. Images accompanying posts are either owned by the author of said post or are in the public domain and included by the publisher of the blog bambinoides.com on its initiative.

Leave a comment

You must be Logged in to post comment.

© 2012-2018 - Copyright - bambinoides.com is not liable for the content of external web pages

© 2012-2018 - © Copyright / Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use. / Derechos Reservados & CLÁUSULA DE EXENCIÓN DE RESPONSABILIDAD: bambinoides.com (El BLOG), tiene un carácter divulgativo, informativo y de entretenimiento, poniendo a disposición de todos, informaciones, noticias, reportajes, material audio-visivo y gráfico de contenido variado y sugestivo con el único interés de provocar un sano debate entre amigos e interesados. De no ser especificado, los artículos, comentarios y/o introducciones son escritos y propiedad de Antonio-"Bambino" Maldonado-Boschetti (indistintamente con siglas AMB - ◊◊B◊◊). Además, en EL BLOG se evidencian vínculos y se divulga información originaria de numerosas fuentes por lo que ni El BlOG ni Antonio-"Bambino" Maldonado-Boschetti son particular y específicamente responsables del contenido de aquellas.-- USO JUSTO (Fair Use): Descargo de Responsabilidad: bambinoides.com y/o Antonio-"Bambino" Maldonado-Boschetti (AMB/◊◊B◊◊) no es (son) propietario de la mayor parte de los audios-vídeos que forma parte de la Galería de Vídeos de bambinoides.com los cuales pertenecen a numerosos autores, artistas y/o productores. Aviso y reclamo que los derechos de autor bajo la sección 107 del Copyright Act 1976 (USA) permiten el uso y divulgación de este material con “USO JUSTO” para propósitos tales como crítica, comentario, noticias, enseñanza, becas e investigación. El “USO JUSTO” (Fair Use) es un uso lícito y permitido por la Ley de Derechos de Autor, que de lo contrario podría constituir una violación. El uso sin fines de lucro, educativo, noticioso o informativo, o personal inclina la balanza a favor del “uso justo" por parte de bambinoides.com.-- La información y el contenido "multimedia" publicado por EL BLOG son de carácter público, libre y gratuito. Pueden ser reproducidos con la obligatoriedad de citar la fuente: http://www.bambinoides.com y a cada autor en particular. -- Los comentarios y reacciones de los lectores publicados en los "posts" son de la entera responsabilidad de quien los emite; EL BLOG intenta implementar un mecanismo de auto regulación y/o puede decidir no publicar comentarios que constituyan abuso o que lesionen el buen gusto y los derechos de otros. -- Se pueden enviar colaboraciones gratis directamente a bambino@bambinoides.com quien se reserva el derecho de publicación.
All photos accompanying posts are either owned by the author of said post or are in the public domain and included by the blog bambinoides.com on its initiative.

Creative Commons Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. Bambinoides.com está disponible bajo una licencia “Creative Commons” Reconocimiento-No comercial 4.0. Cualquier reconocimiento debe ser a bambinoides.com y a cada autor/publicación en particular.

WP-Backgrounds Lite by InoPlugs Web Design and Juwelier Schönmann 1010 Wien
Confrontando la información, - el pasado y el presente...
"Estudia el pasado si quieres pronosticar el futuro" (Confucio)
“La historia es en realidad el registro de crímenes, locuras y adversidades de la humanidad” (E. Gibbon)