The new Federal Reserve Chairman of the U.S. Federal Reserve (Fed/FED) will hold his first hearing in Congress on Tuesday, without the trouble of the economic crisis, and as a member of the Republican Party in power, the outside world generally expects that this debut will mark a reset of the relationship between the Federal Reserve and elected lawmakers.
The Fed has been tense with Congress over the past 10 years. Fed officials and observers said that under Powell, the Fed may be able to let go of many worries, such as fears that the Republican Party, which has the majority, will strengthen supervision of the Fed. The Fed's tension with Congress can be traced back to the Fed's launch of various politically controversial policy plans during the financial crisis, and includes the incumbent Chairman Yellen who was sometimes troubled by lawmakers during Congressional hearings.
get rid of worries, which in turn may create breathing space, a longer debate on how the Fed works, and a discussion on whether work procedures should be adjusted in the near future, such as by holding press conferences after each policy meeting instead of just once a quarter. The Federal Reserve holds eight policy meetings every year.
Some Fed policy makers believe that the Fed should reflect comprehensively, such as the way it treats inflation. "It's very much looking forward to it," said Brad, president of St. Louis, a moderate Republican, who is a moderate Republican, when Powell was referring to the prospect of an improvement in the Fed and Congress relations.
"No rain is a good time to repair the roof."
This will be Powell's first public appearance since he replaced Yellen. He will be able to set the tone for his views on the economy, recent market fluctuations, and the impact of the government's fiscal policy adjustments.
Recent stock market declines and rising inflation concerns mean that Powell may be busy debating whether the Fed should speed up interest rate hikes to cope with inflation, or whether to adhere to the gradual pace of interest rate hikes advocated by Yellen. Speeding up interest rates could annoy the White House, which is determined to boost the economy.
So far, economic data has not been strong enough to suggest they may raise more than three times this year, and in fact, some officials say that inflation has been below target for a higher level after years of inflation is below target.
Chart: Federal Reserve Chairman Congress debuts
honeymoon period with Congress
Although the benign economic environment has helped, analysts and experts studying the relationship between the Federal Reserve and Congress said that a more important point may be whether the Republican-led Congress will give the new Federal Reserve chairman a honeymoon period so that he will not be threatened by Congress' strengthening regulation for many years like Yellen.
And the Democratic Party may now be the party in the attack, criticizing former investment bank executive Powell for ties with the financial industry, fearing that he might relax regulation. But overall, “a lot of factors that are good for Powell will ease the atmosphere,” said Sarah Binder, a political scientist at George Washington University, who recently published a book on Congress’s relations with the Federal Reserve.
Binder's book collaborator Mark Spindel, founder of Washington-based investment firm Potomac River Capital, said the partisan change from Yellen to Powell was "absolutely important".
"Powell was able to benefit because he was not Yellen," Spindel said. Considering the current economic situation, Powell's advantages are something that Yellen does not have, and Yellen 's predecessor Benank "of course they do not have it either."
Although Benanke was appointed by the Republican president, after his first term ended, Democratic President Barack Obama asked him to be re-elected. But Benank's second term faced difficulties when confirmed by Congress because of his controversy in debt purchases and rescue measures to combat the economic crisis.
During his four-year term, Yelun was confronting the Republican proposal to strengthen supervision of monetary policy, and the Republican leadership did not consider reforms such as raising inflation targets or implementing negative interest rates, which often discouraged Yelun.
Yellen has also been criticized for not reducing his balance sheet at a faster pace and Congress’s requirements for legal affairs documents.
What is good for Powell is that most of these problems were resolved before he took office. In addition, at least for now, the Fed's moderate rate hike path will give the Republican tax reform the best opportunity to achieve the results the Republicans expect.
Karim Basta, chief analyst at III Capital Management in Boca Raton, Florida, said the atmosphere between the Federal Reserve and Congress is more calm and is "constructive" for the market.
This article is from Reuters Chinese website
For more exciting information, please come to the Financial World website (www.jrj.com.cn)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-