Press Clips

Fed regulation, supervision take backseat in independence fight By Kyle Campbell Federal Reserve officials are battling to maintain their political independence on monetary policy, but the same cannot be said for their regulatory and supervisory authorities. Instead, central bank officials have downplayed their ability to set their own banking oversight policies rather than boisterously defend it from the Trump administration's efforts to bring it under more direct executive control... Some policy analysts and observers see the Fed's disparate treatment of its authorities as a pragmatic choice. Facing pressure on multiple fronts, Karen Petrou, managing partner at Federal Financial Analytics, said the Fed was wise to bolster its monetary independence — and fortunate to have had it explicitly exempted from the Trump administration's overtures."The Fed is lucky to have maintained the Trump administration's agreement to its monetary policy independence in the executive order the president issued on that point," Petrou said, [...]

How Treasury’s Bessent Is Upending Bank Regulation Host Rob Blackwell Not that long ago, the Treasury secretary mostly took a back seat to the banking agencies in crafting policy, stepping in only during times of crisis. Not anymore. Karen Shaw Petrou, managing partner of Federal Financial Analytics, discusses Treasury Secretary Scott Bessent’s expansive view of his own role, why he’s taking charge, and what it means for banks. ow.ly/pt0550VjRAs

Trump’s plan to rein in agencies sparks alarm for the Fed By Victoria Guida and Sam Sutton 02/21/2025 The Trump administration has made clear it will not directly interfere with the Federal Reserve’s ability to set interest rates. Almost everything else at the central bank is potentially on the table....“There are many different avenues to affect monetary policy without direct hands on the wheel,” said Karen Petrou, the managing partner of Federal Financial Analytics. “The Fed — since 2008 — has significantly broadened and altered the way it transmits monetary policy.”... https://www.politico.com/news/2025/02/21/trumps-plan-federal-reserve-00205526

Big banks are raking in cash By Caleigh Wells The end of 2024 was a great time for big banks. Goldman Sachs, Citigroup, BlackRock — a bunch of financial institutions posted their calendar fourth-quarter earnings Wednesday. And a lot of them exceeded investors’ already rosy expectations. JPMorgan Chase and Wells Fargo, for example, both saw their net income soar 50%. Several factors came together in the quarter that spelled good news. “There was a lot of market volatility, and banks traditionally do very well when markets are volatile,” said Karen Petrou, managing partner at Federal Financial Analytics. Petrou said volatile markets make people trade, seek advice and look for other services. Much of that volatility was based on election uncertainty. But Petrou doesn’t expect that to end. “Some of what the president-elect [Donald Trump] says may be just bluster, but bluster from the Oval Office really moves markets, and I [...]

Barr's self-demotion changes little for regulatory outlook By Kyle Campbell Michael Barr has elected to end his term as Federal Reserve's top regulator a year and a half ahead of schedule, taking the threat of a costly and potentially damaging legal fight with the incoming Trump administration off the table for himself and the central bank...Karen Petrou, managing partner of Federal Financial Analytics, said whether Fed Chair Jerome Powell allows Barr to helm the committee after he vacates the vice chair position on Feb. 28 will dictate the degree and speed of policy change at the Fed, particularly as it relates to supervision. "If there is a new chair of the Fed committee on [supervision and regulation], things could change more quickly at the Fed," Petrou said. "If not, then not." ...Regardless of what happens with the Fed's vice chair for supervision, Petrou said changes to bank policy were always [...]

Where the Fed's Michael Barr goes from here By Kyle Campbell Michael Barr has a lot to do and little time to do it. His term as vice chair for supervision at the Federal Reserve ends in 19 months. Before then, he hopes to change liquidity standards, require more banks to issue long-term debt and rewrite the capital framework for the nation's largest banks...The proposal stems from an agreement struck by the Basel Committee on Banking Supervision in 2017, which was itself a product of the group's post-global financial crisis policy response. Implementing the Basel endgame has been a thorny issue for regulators around the world. The U.K. and the European Union also have not fully adopted the standards into their bank oversight regimes.But Karen Petrou, managing partner of  Financial Federal Analytics and a leading expert in regulatory policy, said the U.S. proposal put forth last year was simply too [...]

Trump taps Scott Bessent for treasury secretary Host, Sabri Ben-Achour,  talks with FedFin managing partner, Karen Petrou, about the role of Treasury Secretary. (2:00min) https://www.marketplace.org/shows/marketplace-morning-report/trump-taps-scott-bessent-for-treasury-secretary/  

The one institution that Trump can’t afford to break Some of Trump’s closest advisers are angling for the president-elect to choose a candidate who will shake things up at Treasury. By Sam Sutton Donald Trump has chosen to move fast and break things with his early picks for top Cabinet posts. He is facing stiff resistance to that strategy when it comes to the Treasury Department. The president-elect has been hung up for days over who will get the nod for Treasury secretary, the most powerful economic post in his Cabinet. It had been a two-man race between billionaire Howard Lutnick, Trump’s transition team co-chair, and Scott Bessent, a hedge fund executive, until internal squabbling created openings for other candidates, including former Federal Reserve Gov. Kevin Warsh, Sen. Bill Hagerty (R-Tenn.), and Apollo Global Management CEO Marc Rowan....A mismanaged Treasury could “add more uncertainty to the Treasury bond market, which [...]

Changes coming to the Fed in a Trump presidency By   Kyle Campbell Donald Trump's return to power all but guarantees that changes are coming to the Federal Reserve Board of Governors, but the range of potential shake-ups varies widely. At a minimum, Trump will have the opportunity to appoint two governors to the board during the coming four years and determine the leadership of the body....Karen Petrou, managing partner of Federal Financial Analytics, said whether or not the Trump administration seeks to remove Barr or his title will depend on who runs the incoming president's transition and what they prioritize. Because of the legal uncertainties around removability, she expects such an undertaking would be, at most, a low priority. "The external environment, whether it's any kind of financial market stress, geopolitical risk, civil disobedience, or Trump trying to do all the things he cares about doing personally and surrounding himself [...]

Why the economy drove voters toward Donald Trump Host Davis Brancaccio talks to Federal Financial Analytics' managing partner, Karen Petrou about how economic inequality explains a lot of votes for Donald Trump. https://www.marketplace.org/2024/11/07/why-the-economy-drove-voters-toward-donald-trump/