Powell nominated new Fed chief

Jerome Powell will be the next chairman of the US Federal Reserve. Powell will replace Janet Yellen, whose term at the head of the influential central bank ends in February. Some commentators fear banking regulations will be eased, while others predict volatile share prices.

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Financial Times (GB) /

Banking regulations must remain strict

The Financial Times doesn't approve of Powell's hints prior to his appointment that he would ease the regulations for the financial sector:

“He has argued for financial deregulation, rolling back some of the post-global crisis clampdown on risky behaviour. Together with the views of Randal Quarles, the vice-chairman for bank supervision, the Fed seems likely to shift towards arguing for more lax rules for financial institutions. However, Mr Powell's views on the subject are relatively nuanced and moderate. He has extensive experience in financial markets and is regarded as a pragmatist rather than an ideological deregulator.”

Jornal de Negócios (PT) /

Potential instability on the stock markets

Regardless of who actually gets the job the nomination of a new Fed chief always causes a stir on US stock markets, Jornal de Negócios points out:

“The soaring US share prices are likely to face a period of instability after this nomination even though Powell is expected to pursue a policy of continuity. According to a study by LPL financial strategist Ryan Detrick which includes historical data, the Dow Jones index has had a negative average performance for the first six months after every appointment of a new Fed chief since 1914. ... This doesn't necessarily mean that Powell will accelerate the correction of US share prices, but a certain amount of volatility is to be expected.”