Trump’s Fed Chairman Nominee ‘Good News’ for Gold Investors
$GLD, $SLV, $USD
President Donald Trump’s selection for the next Chairman of the Fed’s Board of Governors will not alter policy much, and could be good news for Gold investors.
Trump’s selection of current Fed Governor Jerome “Jay” Powell follows months of public speculation about the possible candidates.
Current Fed Chairwoman Janet Yellen becomes the 1st Chair in decades not to be reappointed for a 2nd 4-year term.
Financial markets greeted Mr. Powell’s appointment happily, as it is believed that he will be more Dovish than two of the other finalists.
A Dovish Fed means a slower pace of interest rate hikes, in the long term that could be good for Gold.
Expect that in the long term, Mr. Powell’s policies will just continue Ms. Yellen’s. Mr. Powell had voted and supported Ms. Yellen during her tenure as the Fed Chairwoman.
Because of Mr. Powell’s alignment on all issues with Ms. Yellen, both the Fed’s friends and foes view his Chairmanship as a continuation of Yellen’s policies.
Jay Powell is a lawyer, not a PhD-economist, the 1st non-economist to head the Fed since G. William Miller from 1978-79. However if confirmed, Mr. Powell would be the 1st Fed Chairman to come from an investment banking background.
That has Wall Street seeing Green, as they hope it will lead to a more understanding regulatory regime in addition to business-friendly monetary policy.
Wall Street’s expectation is that Mr. Powell will be more understanding of Wall Street’s needs. Markets hope that translates to more dovish monetary policy, less financial regulation, and a continuation of the stock market’s expansion.
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