Jerome Powell

CURRENT APPOINTMENTS

• Member of the Board of Governors

• Board Member of the Bendheim Center for Finance at Princeton University

• Board Member of the Nature Conservancy of Washington DC and Maryland

FEDERAL RESERVE UNDER JEROME POWELL

• Overall, his Fed was much different than under the past chairman.
• Unlike his recent predecessors who had an academic background, Powell had primarily private sector experience.

• For most of 2018, he focused on the real economy, not stock market performance.

• Fed officials rarely issue public comments outside of official Fed events (far more public statements under Yellen and Bernanke)

• Directed the Fed to look for new methods to measure REAL economic levels (past measurements have been manipulated)

• Adopted a policy that fed focus was on reaching  a "neutral interest rate" without concern of stock market valuations

• Oversaw a Hawkish Fed policy 2018: multiple rate hikes and QE on Autopilot

• Didn't waiver in 2018 as Emerging Markets crashed (some think because of Fed Policy Tightening)

• Claims that the Fed is Data Dependent (not driven by market performance)
• He has emphasized the Fed’s accountability to Congress and its obligation to communicate clearly to the public. 

• Fed will continue to focus single-mindedly on creating and sustaining an economy that benefits all American families and businesses.
  

JAN 2018 - DEC 2018 POLICY

• Fed policy was set on 3-4 rate hikes/year

• Page of QT would reach $50B/month and stay there

• Not concerned about EM problems caused by this

JAN 2019 POLICY SHIFT

• Only a major crisis would change this

• Said that he'd consider changing balance sheet policy if needed (1/4/19)

• Said that he might end QT earlier than expected (1/25/19)

• Suggested that there may be no more rate hikes in 2019 (even with historically low unemployment)

• Criticism that Powell shifted to supporting the markets vs. normalizing policy (Powell Put) aftermarket declines in Dec 2018

• One of the biggest Fed reversals / policy shifts in history

• Potential Reasons for Policy Shift

• Credit Market Break Down:

• High Yield Bonds dropped nearly 7%.

• No High Yield issuance in 12/18 (40 days) - first month since 2008 Lehman collapse

• Jan 30, 2019 is the day he publicly became concerned about stock markets (like Bernanke and Yellen before him)

NOTABLE ACTIONS AND SPEECHES

• Indicated that the Fed would raise rates above the neutral rate and that we weren't at the neutral rate yet  (October 2018)

• Sent interest rates higher (10-year treasury highest since 2011)

EARLY LIFE AND CAREER

• Powell was born in Washington, D.C. 
• While at Georgetown, he was editor-in-chief of the Georgetown Law Journal.
• Before joining the administration, he worked as a lawyer and investment banker in New York City.
• Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. There, he was responsible for policy on financial institutions, the Treasury debt market, and related areas. 
• Before his appointment to the Board of Governors, Powell was a visiting scholar at the Bipartisan Policy Center in Washington, D.C., where he focused on federal and state fiscal issues.