Trump’s relationship with Yellen has evolved; during the 2016 presidential campaign he said the Fed chief should be “ashamed” of the way she has run the Fed, arguing that Yellen kept policy loose for political reasons to boost the fortunes of former President Barack Obama.
Since taking office, though, his views have changed and he offered warm words for her Thursday despite deciding to replace Yellen and make her the briefest-serving Fed chair since G. William Miller from 1978-79.
Yellen’s term has been marked by a mostly uninterrupted bull market run in stocks that began in March 2009 and low interest rates even as the Fed has sought to unwind the stimulus initiated during the crisis. The central bank has hiked its benchmark interest rate four times under Yellen and has taken the first steps in unwinding the $4.5 trillion balance sheet built up during the efforts to spur growth through bond purchases.
Yellen is “a wonderful woman who’s done a terrific job,” Trump said. “We have been working together for 10 months and she is absolutely a spectacular person. Janet, thank you very much. We appreciate it.”
Powell was named to fill an unexpired term in 2012 that won’t end until 2028. He is viewed as a convenient choice, someone who likely will continue the programs of the Yellen Fed but allow Trump a chance to put his own stamp on the central bank.
“I’m both honored and humbled by this opportunity to serve our great country,” Powell said. “If I am confirmed by the Senate, I will do everything within my power to achieve our congressional assigned goals of stable prices and maximum employment.”
The Fed is in the midst of normalizing the historically accommodative monetary policy it had begun to help pull the U.S. from the throes of the financial crisis and the Great Recession.
Under Yellen, the Fed has hiked interest rates four times and is expected to approve another increase in December. In addition, it is unwinding its $4.5 trillion balance sheet, which primarily consists of bonds the Fed purchased in an effort to drive down mortgage rates and push investors to risk assets like stocks and corporate bonds.
Powell has been part of the Fed’s voting consensus since taking his seat, not once veering from the majority’s position.
“I think the president has made a spectacular choice, and I’m really supportive of what the president is doing,” Cohn told the Economic Club of Washington, D.C. earlier in the day.