us central bank may face shakeup under trump administration
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

US Central Bank may face shake-up under Trump administration

Arab Today, arab today

Arab Today, arab today US Central Bank may face shake-up under Trump administration

US Federal Reserve Chairperson Janet Yellen testifies before a Congressional hearing on Capitol Hill in Washington recently.
Washington - Arab Today

Change at the US Federal Reserve could come quickly with President-elect Donald Trump’s team pledging to promptly fill high-level central bank jobs and roll out a tax and fiscal plan that could rewrite policymakers’ core economic assumptions.
Fed officials already say their plan to gradually increase interest rates may need to be accelerated to accommodate the new administration’s economic proposals, which could push inflation higher.
The concerns for Fed Chair Janet Yellen are broader as she faces a 14-month window to preserve her legacy and try to ensure the central bank’s independence in the face of a possible four or more Trump appointees to its seven-member board of governors.
Yellen’s term as Fed chief expires in February 2018, and Trump is likely to name a successor in synch with his desire to cut financial regulation, lower corporate taxes, reorder fiscal policy, and possibly impose some of the constraints on the Fed that Republicans in Congress have long advocated.
Yellen, 70, a ranking Fed official for the past 12 years and the top US central banker since 2014, laid out a long list of concerns during recent questioning before Congress: that any fiscal boost not blow up the deficit and be tailored to improve growth and productivity; that the regulations crafted after the 2007-2009 financial crisis not be trashed; that the Fed not be hamstrung by policy rules or political pressure.
“There is clear evidence of better outcomes in countries where central banks can take the long view, are not subject to short-term political pressures,” Yellen said in her testimony. 
“Sometimes central banks need to do things that are not immediately popular.”
Fed officials would not comment on whether Trump and Yellen have spoken, or describe the contact so far between the central bank and the Republican businessman’s transition team. 
Trump transition officials could not be reached for comment.
DIFFERENT OPERATING PHILOSOPHY
It remains unclear how deep a stamp Trump wants to put on the Fed, or what he feels about issues like central bank independence that are fundamental to Yellen and her peers.
Trump’s sharp comments about Yellen during the presidential campaign, when he accused her of setting monetary policy to help Democrats, rattled Fed officials who felt he had crossed a line. 
But it is not known whether he’ll be content to merely change personnel — Fed Vice Chair Stanley Fischer’s term also runs out in 2018 — or whether he hopes to infuse the central bank with a different operating philosophy altogether.
Congressional Republicans are expected to push legislation forcing more oversight of the central bank, possibly tying it to a monetary policy rule that more mechanically sets rates. 
Among the candidates mentioned as Yellen’s possible replacement is Stanford University economics professor John Taylor, whose “Taylor Rule” is often used in analysis and as a reference point in debate over the usefulness of rules in general.
In his first comments after being named as Trump’s choice for Treasury secretary, Steven Mnuchin indicated in a Fox Business interview that the new administration’s plans could quickly alter the collegial and consensus-driven dynamic Yellen has tried to mold.
The plan is to move soon to fill two open board seats at the Fed, and appointing one of those as a vice chair of supervision “will be a big priority,” said Mnuchin, a former Goldman Sachs partner and Hollywood financier.
Many analysts feel such a move could prompt the resignation of Fed Gov. Daniel Tarullo ahead of the expiry of his term in 2022, giving Trump a fifth board seat to fill. A former Clinton administration economic adviser appointed to the Fed by President Barack Obama, Tarullo currently handles regulatory issues but has never been formally named vice chair. 
He would not comment on his plans in a public appearance last month.
Financial markets, which had been spooked by Trump’s anti-trade comments during the campaign, so far appear to expect smooth sailing and a sober version of Trumpism.
The prospect of major tax reform has bolstered US stocks, especially in the financial sector where regulations are expected to be eased, and the dollar has rallied against major currencies.
Yet for the Fed, Trump’s victory brings a new and possibly unnerving sort of uncertainty.
The Fed has the equivalent of a university full of PhD economists who can employ sophisticated models to gauge how new tax or fiscal policies might change growth, inflation and unemployment.
What they cannot model is the fallout if a major trade agreement is summarily ripped up, or if Trump follows through on campaign threats to declare China a currency manipulator.
“Do you think the ideologue or the pragmatist prevails?” said Cornerstone Macro analyst Roberto Perli, who like many in the markets argues that Trump’s most volatile rhetoric won’t find its way into practice.
Fed officials have so far struck a cautious note.
“It is time to be patient and see how things unfold,” Gov. Jerome Powell said at the Brookings Institution in Washington on Wednesday.
But some feel that policymakers may need to get on top of the coming wave.
“Fed officials can’t simply dismiss the prospect of legislative reforms anymore,” Dartmouth University economics professor and former Fed adviser Andrew Levin said. 
“It seems practically inevitable.”

Source: Arab News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

us central bank may face shakeup under trump administration us central bank may face shakeup under trump administration

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

us central bank may face shakeup under trump administration us central bank may face shakeup under trump administration

 



GMT 15:46 2018 Wednesday ,12 December

Festive Fashion by Dubai-based designer ASMARAÏA

GMT 07:44 2017 Thursday ,28 December

Nermein Al Fekki participates in new drama show

GMT 20:37 2011 Thursday ,10 March

Guardian correspondent missing in Libya

GMT 15:29 2017 Tuesday ,16 May

Al Ahly Club is keeping Hossam El Badry

GMT 21:04 2018 Friday ,19 January

BDF holds graduation ceremony

GMT 02:24 2017 Tuesday ,29 August

Yogyakarta intensifies village tourism promotion

GMT 20:00 2014 Wednesday ,10 December

30 simple ways to change your life for better

GMT 06:40 2017 Saturday ,11 March

Iraq forces advance in Mosul

GMT 07:30 2017 Wednesday ,18 January

Daesh assault halts food aid drops in Syria's Deir Ezzor

GMT 15:16 2017 Monday ,30 October

Britain defends Balfour Declaration
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday