Showing posts with the label Jerome Powell

The Next Fed Chair

We note ongoing discussions concerning the replacement of the current Chair of the Federal Reserve, Jerome Powell. While Mr. Powell was perhaps the most competent policymaker chosen by an Administration noted for it's lack of competence,  there are reasons to consider replacing him. In the face of novel crises like COVID, Global Warming and the George Floyd protests, we believe a new perspective is required.  We encourage Mr. Biden to consider replacing Mr. Powell with Roger Ferguson, retiring CEO of TIAA-CREF. As we noted, in 2006, Mr. Ferguson was directly responsible for saving the US economy in the days following 9/11. See: Mr. Ferguson will be better able to deal with the growing economic and social costs of racism. The Fed has consistently been wrong about, well, Black people. In response to a question from Congresswoman Joyce Beatty (OH) about Black unemployment, former Fed Chair Janet Yellen

Semiannual Monetary Policy Report Hearing

Last week, Chairman of the Federal Reserve, Jerome H. Powell appeared before the House of Representatives Committee on Financial Services to present the Semiannual Monetary Policy Report. Chairman Powell opened his remarks by stating that “the economy performed reasonably well over the first half of 2019 and the current expansion is now in its 11 th year.” Inflation has run below the FOMC 2% objective, trade tensions and concerns about global growth have weighed on economic activity." The Current Economic Situation Labor Market: job gains remain healthy, with the unemployment rate falling to 3.7% in June. Employers are increasingly willing to hire and train workers with fewer skills.   Unemployment for African Americans and Hispanics remain well above the rates of whites and Asians. Urban employment rates are higher than those in rural communities. Labour force participation by those in their prime working years is lower in the US than in comparable nations. G

Why the Fed is wrong about Libra

The Federal Reserve Act (FRA) requires the Chairman of the Federal Reserve System  to testify before the House Financial Services Committee and the Senate Banking Committee twice a year, in February and July, on how the Board handles monetary policy and its observations on economic developments. In keeping with that requirement, the current Chairman of the Federal Reserve, Jerome Powell, testified before the House on July 10th. He indicated as follows: Economic activity increased at a solid pace in the first part of 2019. The labor market has continued to strengthen: unemployment fell from 3.9% (Dec) to 3.6% (May), wage gains remained moderate.  Inflation has been running below the Federal Open Market Committee’s ( FOMC ) longer- run objective of 2 percent.  In June, the FOMC judged that current and prospective economic conditions called for maintaining the target range for the federal funds rate at 2 1⁄4 to 2 1⁄2 percent.  Inflation: Consumer Price Index = 1.5 (May).