Powell sworn in as Fed chairman

Powell sworn in as Fed chairman
© Camille Fine

Jerome Powell was sworn in as Federal Reserve chairman on Monday, pledging to boost transparency and build on nearly a decade of financial stability.

Powell, a Republican first appointed to the Fed in 2012, succeeds Janet YellenJanet Louise YellenTrump criticizes Fed for rate hikes in break with precedent Signs of global stress will test Federal Reserve on economy Who is the boss when it comes to Federal Reserve and Congress? MORE, the first woman to lead the central bank, who had served since 2014.

Powell said in a taped statement that he was “humbled and honored” to lead the Fed while it mulls how to reset monetary policy before an expected recession.

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“As I begin my term, I want to stress my commitment to explaining what we’re doing and why we are doing it,” Powell said. “My colleagues and I at the Federal Reserve will put everything we have into serving you and our country with objectivity, independence, and integrity.”

Powell begins his term with a strong economy at the tail end of its recovery from the 2008 recession. Unemployment is close to 4 percent and wages are increasing in response to strong labor market. But inflation overall has lagged behind the Fed’s 2 percent target, and the bank is aiming to raise interest rates to a neutral level without shocking the economy.

The Fed is expected to raise interest rates three times in 2018, and a better-than-expected January jobs report jolted Wall Street last week into a sell-off, bracing for the Fed action.

Powell is a moderate with deep financial sector experience and monetary policy views close to Yellen’s. He voted with Yellen on every monetary policy issue while they served together, and they share much of the same stances on how to lessen the Dodd-Frank financial reform law's burden on smaller banks.

Powell has praised Dodd-Frank for building a stronger, safer financial system, but he is one of several financial regulators who back ways to rein in the law.

“Our financial system is now far stronger and more resilient than it was before the financial crisis that began about a decade ago. We intend to keep it that way,” Powell said.

He is expected to be more attuned to the impact of the Fed’s policies on the financial markets than a traditional Fed chair with deeper academic background, however. 

Powell worked primarily in investment banking before serving as Treasury Department undersecretary from 1990 to 1993. He worked at the Carlyle Group, one of the world’s largest investment firms, from 1997 to 2005 and joined the Fed in 2012, the Republican in a bipartisan pair of Fed nominees from then-President Barack ObamaBarack Hussein ObamaMontana governor raises profile ahead of potential 2020 bid Trump was right to ditch UN’s plan for handling migrants Ex-White House stenographer: Trump is ‘lying to the American people’ MORE.

The Fed only has three seated governors, one shy of its official quorum. The bank will not be able to approve major financial regulatory actions until the Senate confirms another governor. President TrumpDonald John TrumpSchiff: Surveillance warrant docs show that Nunes memo 'misrepresented and distorted these applications' Chicago detention facility under investigation following allegations of abuse of migrant children Ex-Trump aide: Surveillance warrants are 'complete ignorance' and 'insanity' MORE has nominated Carnegie Mellon economics professor Marvin Goodfriend to the Fed board and is expected to nominate a Fed vice chairman within months.