Why the Federal Reserve Could Look Totally Different Next Year
By Martha C. White
President Donald Trump’s nomination of Jerome “Jay” Powell as the next Federal Reserve chair is predicted to bring little change to the central bank’s incremental rate increases and unwinding of recession-era quantitative easing, although the multimillionaire and former investment banker brings a Wall Street-friendly skepticism of regulation. …Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting firm that specializes in financial regulation, predicted that the one-two punch of Powell and Quarles could lead to a relaxation of regulations like bank liquidity requirements. “It’s important to note, in general, that the monetary policy under a Powell Fed will still be made by the same Federal Open Market Committee that he sat on, and that’s much more of a consensus-driven process, but regulatory policy is really made by the board,” she said. “I think you’re going to see, in time, a significant restructuring of some of the post-crisis rules,” she said, adding that she didn’t expect a wide-ranging repeal of the landmark 2010 legislation.