Very low interest rates - which have helped the economy - "are no longer appropriate". She said it Jerome Powell, the man nominated by Trump to replace Janet Yellen as the next governor of the Federal Reserve. During the hearing before the Senate Banking Committee, Powell (Republican) said that a low cost of money "was a burden" on fixed income. The cost of money is at 1-1,25% and the market expects it to be raised by 12 basis points at the Fed meeting on 13 and 25 December; it would be the third tightening of 2017, the fifth since June 2006. "I'm not ruling it out," Powell commented.
However, Powell added, the American economy is “strong” ed It's time to normalize the Federal Reserve's monetary policy in terms of both rates and the reduction of its balance sheet. According to Janet Yellen's successor, regarded as the Republican version of her (she is from a Democratic background), patience in removing an accommodative monetary policy has done her good. During his testimony to the Senate Banking Committee, a process necessary for the confirmation of his appointment, Powell said he "feels good" in assuming the most important economic role in the world.
Powell also said that in the United States there are no more banks too big to fail. And he said he was in favor of a "rewriting of the Volcker Rule" and its targeted application. The reference is to the rules part of the financial reform desired by former US president Barack Obama after the 2008 crisis and which prevent credit institutions from making speculative investments with their own accounts: they also limit the relationships of groups with hedge funds. It must be said that last August, in her speech at the summit in Jackson Hole, Yellen had in turn opened the door to a simplification of the Volcker Rule (which the Trump administration is studying): "There could be benefits in simplifying aspects ” of the standard part of Dodd-Frank. Powell therefore confirms his agreement with the Trump administration on this point. As for the banks, "I would say no", he replied to those who asked him if there are still "too big to fail" credit institutions in the US.
The Republican who has been a member of the Fed board since 2012 is testifying to the Senate Banking Committee, a process necessary for the confirmation of his appointment as Fed governor desired by US President Donald Trump. According to him, "much progress" has been made since the 2008 crisis, the worst since the Great Depression in the 30s. “The US banking system is healthy,” Powell closed.
