Trump's pick for Federal Reserve chief is right choice at right time

Trump's pick for Federal Reserve chief is right choice at right time
© Getty Images

The United States recently received some welcome economic news. While the latest jobs report was solid and gross domestic product growth was stronger than expected, even more encouraging is President Trump’s nomination of Jerome “Jay” Powell to serve as the next chairman of the Federal Reserve. He is the right person at the right time to guide our monetary policy and ensure the soundness of our financial institutions.

In a speech last March in West Virginia, Jay noted, “In my experience, the best outcomes are reached when opposing viewpoints are clearly and strongly presented before decisions are made.” We saw this approach in action during Jay’s two years as a visiting scholar at the Bipartisan Policy Center. On a wide variety of initiatives, Jay demonstrated unique talent for encouraging diverse viewpoints and finding realistic common ground to build a pragmatic consensus.

The Federal Reserve is guided by some of the smartest economists in the world, but we must always remember that economics is ultimately a social science. While driven by empirical data, Fed policy is determined by informed opinions. Jay has an historical appreciation for the role of the Fed chairman in synthesizing opinions and has noted publicly that the Federal Reserve’s unique structure “was forged from compromise. The result of that compromise was a vitally needed central bank whose decisions take into account a broad range of perspectives.”

Jay is a prodigious gatherer and consumer of information. He was rarely seen around our office, or around town, without a large binder of materials under his arm, and he was always eager to learn from those around him. While consumed by his work, Jay was never too busy for a conversation and always accessible to the exceptionally talented junior staff of the Bipartisan Policy Center.

Jay’s informed curiosity was renowned by those who know him from his time at the Treasury Department under President George H.W. Bush. While some have pointed out that Jay is not a Ph.D. economist, his voracious consumption of information and ability to distill and understand complex issues enables him to master diverse subjects in a relatively short period of time. He has become an expert on economic policy through keen intellect, continuous study, drive and determination.

Jay’s abilities and dogged persistence were on full display six years ago through his work with the Bipartisan Policy Center on the federal debt limit. In 2011, as the full faith and credit of the United States was teetering on the brink, Jay was introduced to Treasury Secretary Timothy Geithner by senior fellow Alice Rivlin, a former Fed vice chairman, and Senator Pete Domenici. It was a time when tensions were running high between Congress and the secretary over the pending breach of the country’s statutory debt limit. Various proposals were being bandied about to “prioritize” what government bills would be paid or not paid, should the country’s borrowing authority expire.

In a matter of months, Jay became one of the nation’s leading experts on the substantive and political nuances of the debt ceiling debate. By the summer of 2011, Jay was being asked by congressional leadership to attend “members only” meetings and explain to them the risks associated with failure to extend the debt limit. Jay was invited by the speaker of the House to talk with both the House Republican Conference and the Senate Republican Policy lunch.

Those discussions were at times highly contentious, yet Jay kept his composure and stuck to the facts and objective data, cutting through some of the hyperbole. Neither the chairman of Ways and Means nor the speaker of the House could convince the members that Treasury did not have the ability to prioritize certain government payments over others. Jay, as a credible voice, succeeded in doing so.

Jay’s ability to understand and present often complex data, remain cool under pressure, and set aside partisanship will serve him well when he is confirmed. He and his Fed colleagues will no doubt be tested in the months and years ahead. However, we are confident he has the right demeanor, intellect and approach to seize opportunities and effectively weather any crisis. Now is the time for a strong bipartisan vote in favor of Jerome “Jay” Powell as the next chairman of the Federal Reserve.

Jason Grumet is president of the Bipartisan Policy Center.

William Hoagland is senior vice president at the Bipartisan Policy Center.