US President Donald Trump on Thursday tapped Federal Reserve Governor Jerome Powell to become head of the US central bank, breaking with precedent by denying Janet Yellen a second term but signalling a continuation of her cautious monetary policies. Mr Powell, 64, a lawyer and investment banker appointed to the Fed board in 2012 by then-President Barack Obama, emerged as Mr Trump’s choice from a slate of possible nominees that included Ms Yellen and others who may have pursued a sharp policy shift.
In an announcement at the White House, Mr Trump described the soft-spoken Mr Powell as a smart and committed leader who would build on Ms Yellen’s achievements in steering the US economy after the recovery from the 2007-2009 financial crisis.
“If we are to sustain all this progress, our economy requires sound monetary policy and prudent oversight,” Mr Trump said as Mr Powell looked on. “We need strong and steady leadership at the US Federal Reserve… He will provide exactly that.”
Mr Powell has worked alongside Ms Yellen for the past five years, backing her direction on monetary policy and, in recent years, sharing her concerns that weak inflation justified a continued cautious approach to raising interest rates.
Ms Yellen’s four-year term as Fed chief ends in early February 2018. She will be the first US central bank chief not to be renominated to a second term since 1979.
Mr Trump on Thursday lauded Ms Yellen’s stewardship but did not say why he decided to pass her over for another term. The Republican president said he was impressed by Mr Powell’s experience in the private-sector and “real-world perspective” to government.