• Notes From The Desk | FOMC Announcement

Notes From The Desk | FOMC Announcement Nov 22 2021

Four More Years.

Biden nominates Jay Powell for a second term.

· Jay Powell to serve a second term as chair of the Federal Reserve.

· Lael Brainard, considered the competitor to the throne, assumes the role of vice-chair and is expected to be named vice-chair of supervision (oversees the US banking system).

· This decision provides continuity as the Fed grapples with inflation and the labour market recovery.

The Implications.

· Overall, the appointment is unlikely to result in a significant market reaction.

· Thus far, treasury yields are a few bps higher. With Powell free to focus on inflation and employment without worrying about his job security, the risk is he becomes a little more hawkish.

· Powell has been clear that employment matters more than inflation, so the path forward for interest rates will continue to be dictated by jobs.

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