First published: Prospectmagazine.co.uk, 6/11/2017
It is far from certain whether Jerome Powell, Trump’s pick to succeed Janet Yellen, will rise to the occasion
Would you appoint a sociologist to run a nuclear power station? Or an economist to the position of Lord Chief Justice? Clearly not, so, why has Donald Trump appointed a lawyer to run the Federal Reserve—the US and arguably the global—central bank, when Janet Yellen steps down next February? The choice matters because of America’s still commanding influence on global economic and financial affairs. Jerome, or Jay, Powell is not a bad choice for the Fed, but he is not who you’d want for the challenges that are almost certainly going to crop up in the next few years.
Who knows what drives President Trump’s choices? Yellen’s credentials and record made her a shoo-in for re-appointment. Perhaps Trump disapproved because she was an Obama appointee. Perhaps he and Treasury Secretary Steve Mnuchin wanted someone more amenable to the administration. In any event, Powell follows in the footsteps of G William Miller in the late 1970s—a non-economist appointed in preference to a sitting Chairperson…..Read more: