A dove in monetary policy winking at the deregulation of Wall Street. In three words: a moderate Republican. These are the particular signs of Jerome Powell, the man to whom US President Donald Trump has handed over the helm of the Federal Reserve. Lawyer, financier, teacher, Powell has a prestigious curriculum, but from February - when he takes up his new position - he will also be the first Fed president in the last 30 years not to have a PhD in economics.
Mind you, the titles are not lacking. In 1975, at the age of 22, he completed a first level course in political science at Princeton, and then graduated in law at Georgetown in 1979. A successful political tightrope, he received institutional assignments from administrations of both colors. The most important of him, at least until today, is to Undersecretary of the Treasury obtained during the presidency of George Bush senior, between 1992 and 1993. Twenty years later, in 2012, Barack Obama assigned him an armchair on the board of the American Central Bank, where he was confirmed in 2014 with a mandate until 2028.
In between public roles, Powell maintains a successful career in the finance industry. From 1997 to 2005 he worked as an investment banker for the Carlyle group, one of the most important global private equity giants. He later founded the Severn Capital Partners, an investment company specializing in the industrial sector. But that's not all: in 2008 he became managing partner of the Global Environment Fund, a private equity and venture capital company that invests in sustainable energy. Between 2008 and 2012 she was a visiting scholar at the Bipartisan Policy Center in Washington, where she deals with federal and state taxation.
In short, Powell knows how to make his political soul coexist with that of a financier and obtains consensus among Democrats as on Wall Street. For this reason, the White House has decided to focus on him.
Since he became president, Trump takes credit for the positive economic situation experienced by the USA, where the GDP is in continuous expansion and unemployment is at its lowest. The Donald knows very well that the Janet Yellen's expansionary monetary policy, the Fed's number one expiring. For this reason, putting one of the Republican hawks hungry for monetary tightening in charge of the Central Bank – such as John Taylor or Kevin Warsh, who also remained in the running until the end – would have been a gamble. Trump would have risked himself turning off the faucet of the economic expansion that he loves to boast about.
If only monetary policy had been at stake, therefore, Yellen would have had an excellent chance of being confirmed. Instead, for the first time in 40 years, an American president has chosen not to grant a second term to a Fed governor appointed by his predecessor on the opposite side.
The game was played on financial deregulation. Yellen is a supporter of the Dodd-Frank Act, the law wanted by the Obama administration to curb the speculation of the Wall Street giants. Trump, on the contrary, has always said that he wants to cancel those regulations, which according to him represent a ballast for the economy (even if the savage deregulation was the basis of the 2008 crisis).
In the end, therefore, Powell took the chair, the only candidate to be at the same time in favor of Yellen's monetary policy (which envisages a slow and gradual rise in interest rates), but also of Wall Street deregulation. The only one who manages to please Trump on all fronts, politically and financially. The right man in the right place, even without a doctorate.
