Powell Reappointment Green Light?‥Yellen "Praise for Powell to Biden"

[Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] Janet Yellen, the U.S. Treasury Secretary accompanying President Joe Biden on his visit to Europe, hinted at the possibility of Jerome Powell's reappointment as Fed Chair in an interview with CNBC on the 1st (local time).

Secretary Yellen said, "I discussed the Fed Chair candidates with President Biden and advised him to choose someone experienced and trustworthy."

She specifically added, "I definitely think Chair Powell has done well." Yellen emphasized, "Powell has led the Fed well during an extraordinary time. He responded very effectively to the COVID-19 crisis and established new policies focused on achieving full employment."

Yellen's evaluation, as Powell's predecessor and the most influential figure in the selection of the next Fed Chair, can be interpreted as increasing the likelihood of Powell's reappointment.

CNBC also reported that although Secretary Yellen did not state a specific position, her remarks leaned toward supporting Powell's reappointment.

Recent scandals involving inappropriate stock trading by senior Fed officials are unlikely to negatively impact Powell's chances of reappointment.

Progressive figures such as Democratic Senator Elizabeth Warren have opposed Powell's reappointment, criticizing him for his Republican leanings, easing financial regulations, and being passive on climate change response.

Powell's term expires in February next year. Meanwhile, the Fed is expected to decide on tapering asset purchases after the Federal Open Market Committee (FOMC) meeting scheduled for two days from the 2nd to the 3rd.

If Powell is reappointed, he will be able to lead not only the tapering but also zero-level interest rate hikes, taking responsibility for both the COVID-19 response and the subsequent normalization of monetary policy.

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