Powell Faces New Risks as Fed Chair

Federal Reserve Chairman Jerome Powell’s embrace of his predecessor’s gradual approach to tightening monetary policy is about to be tested.Since Powell accepted President Donald Trump’s nomination almost four months ago, the near-term outlook has changed significantly.Jerome PowellPhotographer: Andrew Harrer/BloombergFinancial volatility has awakened, and a booming stock market has shown it can also go down. A $1.5 trillion tax package is adding stimulus to the U.S. economy at a time of very low unemployment and solid growth, a trend that could red-line demand and kick up a central banker’s worst enemy — inflation. The government wants to test the limits of the world’s appetite for its debt, a boost in supply that’s putting upward pressure on market interest rates.

Source: Powell Faces Policy ‘Combativeness’ in Riskier Post-Yellen World – Bloomberg

Will Dollar Rally or Fade on Fed Powell’s Comments?

Spotlight on Powell

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam

Latest posts by Craig Erlam (see all)