• 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.

Share this...
Share on email
Share on linkedin