US Federal Reserve officials discuss 'slightly steeper' future rate hikes

US Federal Reserve officials signalled that the central bank may have to accelerate the pace of future rate hikes amid stronger economic growth and inflation, according to the minutes of the Fed's latest monetary policy meeting.

"A number of participants indicated that the stronger outlook for economic activity, along with their increased confidence that inflation would return to two per cent over the medium term, implied that the appropriate path for the federal funds rate over the next few years would likely be slightly steeper than they had previously expected," said the minutes of the Fed's March 20-21 meeting released on Wednesday.

At that meeting, the Fed raised its target range for the federal funds rate to 1.5-1.75 per cent, the first rate hike of 2018, reports Xinhua.

It was also the first meeting led by Fed Chairman Jerome Powell, who took the helm of the central bank in February.

What to make of US Fed chairman Jerome Powell's hawkish testimony

Jerome H Powell, the newly minted Chairman of the US Federal Reserve (US Fed) came out as a clear hawk in his first testimony before the Congress on Tuesday.
Powell said that his expectations for domestic economic growth have increased since the beginning of the year, citing the passage of the $1.5 trillion tax cut, lifting of the debt ceiling and stronger global growth.
Our take on his testimony:
1. Clearly hawkish
His talons became visible when he answered a Democrat’s question as to what would cause the US Fed to hike more than three times that the central bank’s guidance currently calls for?
Powell said that each of the Federal Open Market Committee (FOMC) member would take the developments since the December meeting into account and write down ‘new rate paths as we go into the March meeting, and I wouldn’t want to prejudge that.’
2. Personal views take front seat
When the Fed Chair testifies, he speaks for the Federal Reserve, not for himself. But, Powell gave his personal views many times. This is a big break from the past like Janet Yellen, Ben Bernanke or Alan Greenspan.

Jerome Powell rose to top of Trump's list as safe, savvy choice for Fed

Jerome Powell was not on President Donald Trump's early radar as a possible successor to Federal Reserve Chair Janet Yellen, and was angling instead for a job as the U.S. central bank's vice chair for supervision.

But when he was passed over for that position last summer, it was one in a chain of events that set the stage for the 64-year-old Fed governor and former investment banker to take over as head of the world's most powerful central bank.

Trump on Thursday nominated Powell to replace Yellen when her term expires in early February, saying at the White House that the 64-year-old lawyer and former investment banker has the necessary "wisdom and leadership."

Other contenders for the job fell for different reasons, as Trump soured on top White House economic adviser Gary Cohn, decided against renominating Yellen despite largely approving of her policies and came to view two others as posing risks to the economy, according to current and former Fed and government officials familiar with the decision.

In the end it was Powell, a Maryland native, avid cyclist, and guitar hobbyist, who checked all the boxes that mattered but carried none of the negatives.

If confirmed by the U.S. Senate, Powell would become the first person without an advanced economics degree to hold the job since William Miller in the late 1970s.
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Decision today: Is Trump all set to pick Jerome Powell as next Fed chair?

President Donald Trump has informed Federal Reserve Governor Jerome Powell that he is the pick to replace Janet Yellen at the helm of the central bank, a media report said on Wednesday.

The Wall Street Journal report quoted two people familiar with the matter as saying Trump spoke to Powell yesterday to inform him of the decision.

If confirmed by the Senate, Powell would take over from Yellen when her four-year term as Fed chair expires in February. Powell has already been through that confirmation process in order to become a member of the Fed's board.

Yellen was a potential, though dark horse candidate, and earlier in the day Trump praised her as "excellent." But he has made clear in all his appointments he wants to put his own stamp on policy.

The choice marks the first time since Jimmy Carter's administration in the 1970s that a president has failed to reappoint the Fed chair named by his predecessor.

After months of public debate, analysts say Powell represented a middle-ground option for the president, who wanted to mark a departure from the Obama era, while markets prefer continuity and favoured Yellen who has presided over an era of low inflation and steady economic growth.

An attorney by training who has voted with the majority of Fed members since his appointment by Barack Obama in 2012, Powell was seen as a centrist, unlikely to pursue steep rate hikes but a probably more amenable to the Trump administration's deregulation agenda.
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Donald Trump may name Jerome Powell as next Fed Chair: Bloomberg

US President Donald Trump is leaning toward nominating Federal Reserve Governor Jerome Powell as the next leader of the central bank, Bloomberg News reported on Friday.

Citing three people familiar with the matter, Xinhua reported that the decision isn't final and Trump could change his mind at any time.

Trump has recently finished interviews of five candidates for the next Fed Chair, including Powell, Stanford University economist John Taylor, former Fed governor Kevin Warsh, White House National Economic Council Director Gary Cohn and current Fed Chair Janet Yellen, whose term expires next February.

Trump said on Monday that he was "very, very close" to making a decision on who is going to lead the central bank.

Trump's advisors have been steering him toward choosing either Powell or Taylor for the job. Powell is favoured by Treasury Secretary Steven Mnuchin, while Taylor is favoured by Vice President Mike Pence.

While Powell and Taylor are both Republicans, they would have much different approaches to running monetary policy at the central bank.

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Trump's fed chair choice down to Powell, Taylor: Source

President Donald Trump's search for the next chair of the US Federal Reserve has come down to Fed Governor Jerome Powell and Stanford University economist John Taylor, Politico on Thursday cited one source as saying, while another counselled caution.

Trump has said he was considering both Powell and Taylor, but that he also liked Yellen very much. Politico cited an unnamed source who talks regularly to Trump as saying the only finalists were Powell and Taylor.

Another unnamed senior source Politico described as very close to the process said it was not safe to assume Trump will nominate Powell or Taylor for the top spot at the central bank, saying he "changes his mind about it every day."
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