President Trump on Thursday announced he has tappedto lead the Federal Reserve, a move he said will make sure the Fed stays "vigilant and prepared to respond to changes" in the market.
Mr. Trump introduced Powell in the White House Rose Garden, after teasing the press about his decision for weeks. If he is confirmed by the Senate, Powell will succeed current Fed chair Janet Yellen when her term concludes in February. The president praised Yellen, calling her "absolutely a spectacular person" who served "with dedication and devotion." On the campaign trail, Mr. Trump pledged to oust her, although he later said after meeting with her.
The president said 64-year-old Powell, a current Federal Reserve board member, has the "wisdom and leadership" to guide the U.S. economy through any challenges it may face.
"He's strong, he's committed, he's smart," Mr. Trump said of Powell. "And if he is confirmed by the Senate, Jay will put his considerable talents and experience to work leading our nation's independent central bank, which has the critical responsibility to set monetary policy and monitor our banking system as a whole. There are few more important positions than this, believe me, in our government."
Powell said the U.S. economy has made "substantial progress" since the 2008 financial crisis and the financial system is much stronger. He also said the Federal Reserve understands that monetary decisions "matter for American families," as he awaits confirmation by the Senate. Powell also promised to make his decisions "with objectivity," keeping with the Fed's tradition of monetary policy independence.
Yellen released her own statement on Powell's selection.
"I congratulate my colleague Jay Powell on his nomination to be chairman of the Federal Reserve Board," she said in a statement. "Jay's long and distinguished career has been marked by dedicated public service and seriousness of purpose. I am confident in his deep commitment to carrying out the vital public mission of the Federal Reserve. I am committed to working with him to ensure a smooth transition."
Powell, seen as a safe choice, supported the cautious approach to interest rate hikes Yellen pursued during her tenure. Mona Mahajan, an investment strategist for Allianz Global Investors, said Wall Street prefers Jerome Powell to other finalists for the Fed post, in part because he appears to share Yellen's go-slow approach to interest-rate hikes.
"Relative to a John Taylor or Kevin Warsh, Powell is more of a continuity candidate," Mahajan says, suggesting that low borrowing rates could support economic growth and a strong stock market.
Mahajan said she also thinks that more than Yellen, Powell, like Trump, might be inclined to relax some of the stricter regulations that were imposed on banks after the 2008 financial crisis.
"He wants to ease some of the Dodd-Frank rules and relieve some of the pressure on the region and community banks," Mahajan said.
Last month, in a wide-ranging interview with Fox News,an important position "psychotically."
"That's a very important position," Mr. Trump said. "It's also important psychotically. If the right person is there a lot of good things can happen. I think I'm doing a good job for businesses in that way. People are coming into the country; you saw what happened with Foxconn going to Wisconsin."