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在线翻译:
szdaily -> Special Report
Jerome Powell, next chairman of US Federal Reserve
    2018-January-19  08:53    Shenzhen Daily

THE U.S. Senate Banking Committee on Wednesday voted again to approve President Donald Trump’s nomination of Jerome H. Powell as the next chairman of the Federal Reserve.

Powell, 64, a Republican who has served as a governor on the Fed board since 2012, was tapped by Trump to replace Janet L. Yellen as the central bank’s chairman. Her term expired Feb. 3.

The panel had approved Powell’s nomination last month but had to vote again because the White House resubmitted it to this session of Congress this month after the nomination expired at the end of 2017. The nomination now heads to the full Senate for a final vote.

Powell was approved by voice vote of the committee with only Sen. Elizabeth Warren (D-Mass.) dissenting. Warren also was the only no vote when the committee approved Powell 22-1 in a roll call vote Dec. 5.

At his confirmation hearing in Congress, Powell said that he would support the central bank to gradually tighten monetary policy, while easing regulatory burdens on some financial institutions.

The Senate panel also voted to approve the nomination of Randal Quarles as Fed vice chairman for supervision to serve a full 14-year term on the Fed board.

The Fed is expected to leave its benchmark interest rates unchanged at its next policy meeting on Jan. 30-31. The central bank last month estimated it would raise interest rates three times in 2018 if the U.S. economy performs as Fed officials expected.

Powell faces multiple risks as he prepares to take stewardship of the economy. Among the biggest: the threat of being publicly criticized by the president himself.

The Fed zealously guards its ability to make monetary policy decisions free from short-term political pressures, a key feature of its structure. But Trump has already proved willing to buck tradition by targeting the central bank, and its chair, in the bluntest terms on the campaign trail.

“She’s very political, and to a certain extent, I think she should be ashamed of herself,” Trump said of Yellen in a CNBC interview in September 2016. During a presidential debate that same month, he accused Yellen of artificially propping up the economy with low rates.

Now, with the economy showing new strength and stocks hitting record highs, if a Powell-led Fed responds by accelerating interest rate hikes, the president could be provoked to speak up again. And Powell would have to rely on his relationships on Capitol Hill, as well as with Treasury Secretary Steven Mnuchin, to help ward off any such attacks.

Since Trump’s election a year ago, the Fed has grappled with the possibility that the president could publicly criticize the central bank, plunging it into an uncomfortable political spotlight.

“The Fed needs a good reputation, and its credibility matters,” said Sarah Binder, a political science professor at George Washington University.

“If you have criticism coming in from Trump and coming in from Congress, … there will always be questions about whether the Fed will succumb in any type of way or be diverted from its policy prescriptions,” she added. “That makes it harder for monetary policy to work.”

Certainly, the central bank’s best defense against attacks is to keep the economy on an even keel. But if conditions turn sour over the next few years — a real possibility given that the current expansion is already the third-longest in U.S. history — the Fed would be an easy target.

If the president is unhappy with the Fed’s performance, he could also use additional appointments to shake up the central bank.

As a result, the Fed spends considerable energy figuring out how to stay out of politics and preserve its independence.

Its ability to do so will likely soon sit squarely on the shoulders of Powell, who will not only have to guide decisions that affect the economy but also defend them to Congress and the public.

While Trump criticized the Fed more stridently than any major presidential contender in modern history, congressional Republicans have taken aim at the central bank for years. One GOP lawmaker says the key is for the chair to convey his intentions effectively.

“The better the Fed communicates its policy trajectory, both to the public and to Congress, the more it is going to be able to achieve that independence that many Fed officials want,” Rep. Andy Barr (R-KY), who chairs the House Financial Services subcommittee on monetary policy, said in an interview.

Powell is both a Republican and an Obama appointee, providing him with bipartisan support that might help fend off threats to the central bank. A member of the Fed board since 2012, he’s more sympathetic to Republican calls for a simpler rulebook for banks yet also more in line with Yellen on interest rate policy.

He would also come into the job with a fair number of relationships on the Hill already; between January and September in 2017, he met with 13 senators and multiple House members. And since his nomination as chair, he has had a flurry of additional conversations.

Although criticism from the president could undermine public support for the institution, the bigger worry for the Fed is the potential for those criticisms to carry over to congressional action.

The central bank is perpetually involved in a delicate dance with Congress. It has the freedom to set interest rate policy as it sees fit to achieve the dual goals that Congress has given it: price stability and maximum employment.

But the Fed was created by Congress, meaning some of its powers could theoretically be taken away by the legislators. So the chairman must remain on good terms with congressional leaders while not paying heed to whatever short-term policy action the lawmakers would like to see.

“Every Fed chair understands at his or her core that their job is to protect the independence of the Fed, and one of the ways you do that is by maintaining a good relationship with the Congress,” said Laurence Meyer, a former Fed governor who now heads a policy analysis firm.

“Of course, if Congress views the Fed’s performance as seriously lacking, it is more likely to implement reforms that the [Fed] thinks would be damaging to the pursuit of its congressionally mandated objectives,” he added.

House Republicans in particular have sought to have a greater window — and, the Fed worries, more influence — on monetary policy decision-making.

But the more power the Fed aims to use, particularly on the regulatory side, the more it should expect Congress to weigh in, he said.

Yet concrete Fed reform would be hard to achieve. That’s because while most lawmakers would like to make changes to the central bank, there’s no consensus as to what those changes should be.

Powell could help keep it that way in a Republican-majority Congress.

The Fed’s relationship with Congress and the administration could also change simply because Powell has a different personality than Yellen’s. His low-key style is perhaps more suited to the type of political schmoozing that she politely engaged in only when necessary.

Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term.

He was reappointed and sworn in on June 16, 2014, for a term ending Jan. 31, 2028.

Prior to his appointment to the board, Powell was a visiting scholar at the Bipartisan Policy Center in Washington, D.C., where he focused on federal and state fiscal issues. From 1997 through 2005, Powell was a partner at The Carlyle Group.

Powell served as an assistant secretary and as undersecretary of the Treasury under former President George H.W. Bush, with responsibility for policy on financial institutions, the Treasury debt market, and related areas. Prior to joining the administration, he worked as a lawyer and investment banker in New York City.

In addition to service on corporate boards, Powell has served on the boards of charitable and educational institutions, including the Bendheim Center for Finance at Princeton University and The Nature Conservancy of Washington, D.C., and Maryland.

Powell was born in February 1953 in Washington, D.C. He received an A.B. in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. While at Georgetown, he was editor-in-chief of the Georgetown Law Journal.

Powell is married with three children.

(SD-Agencies)

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