The Federal Reserve is getting a shakeup.
President Trump has named Jerome Powell as the next chairman of the nation’s central bank.
Pending Senate confirmation, he will replace Janet Yellen, the first woman to head the Federal Reserve, who was appointed by President Obama in 2014. Yellen’s term expires in early 2018.
By tapping Powell, Trump is breaking with tradition. Presidents usually allow their predecessor’s Fed chair picks to remain on the job for a second term. But Powell is reportedly considered a safe choice who is likely to continue on with his forerunner’s policies.
Jerome Powell will replace Janet Yellen, the first woman to head the Federal Reserve, who was appointed by President Obama in 2014
Who is Jerome Powell?
Powell, a Republican, has been a member of the Federal Reserve’s seven-member Board of Governors since 2012. He also served as an Undersecretary of the Treasury for George H.W. Bush, and was an attorney and investment banker in New York, according to his Federal Reserve profile.
He was a partner at the private equity firm Carlyle Group, where he reportedly amassed a personal fortune of up to $55 million. He has a reputation as a consensus builder who studies issues carefully before making decisions, according to the Washington Post.
Yellen has overseen interest rate increases as the economy has improved, and ended a bond repurchase program associated with the financial crisis.
Powell is considered a reasonable pick who won’t dramatically alter the course of the central bank. He is, however, considered by some to be more pro-business with regard to regulations than his predecessor.
What does the Federal Reserve do?
The Federal Reserve is the central bank of the U.S. It oversees 12 district banks, which together are responsible for the monetary policy of the U.S.
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The Federal Reserve’s mission is to oversee the health of the nation’s financial system. It attempts to keep the economy strong and growing by enacting policies to maintain low inflation and healthy employment levels. It does this primarily by adjusting inflations rates, and lending money to the nation’s banks.
The central bank was responsible for making sure the financial system didn’t freeze up during the financial crisis that began in 2008. It flooded the banking system with cash, and decreased interest rates to below 0%. It also was responsible for a program called quantitative easing, where it bought up trillions of dollars worth of government bonds, which helped shored up the financial system.