US: Jerome Powell replaces Janet Yellen as Fed chair

Jerome Powell officially took the helm of the Federal Reserve Board on Monday, replacing Janet Yellen in a carefully choreographed transition.

Powell was sworn in Monday morning in a private ceremony.

In a brief video statement posted on the Fed’s website, Powell introduced himself to the country.

“Hello, this is Jay Powell,” he began.

In the statement, Powell struck the theme of transparency, promising to explain “what we are doing and why we are doing it.”

Powell noted the recent good economic performance, stressing that unemployment and inflation are low and the economy is growing.

“Through our decisions on monetary policy, we will support continued economic growth, a healthy job market and price stability,” he said. He did not directly address the recent selloff in stocks.

At one point on Monday, the Dow Jones Industrial Average DJIA, -4.60% was down more than 1,500 points.

Analysts warned investors not to count on the Fed to come to the rescue

Investors have started to think the Fed might slow the pace of rate hikes this years. Investors now see the Fed hiking rates by a quarter point in March and September. Before the selloff, investors had priced in three moves in March, June and December and were starting to price in a fourth move.

Powell said the financial sector is “far stronger” than it was before the financial crisis.

“We intend to keep it that way,” he said.

“My colleagues and I will remain vigilant and we are prepared to respond to evolving risks,” he added.

In a column in the Financial Times, former Obama Treasury Secretary Larry Summers said Powell’s challenge at the Fed will be to work out how to achieve growth that is adequate and financially sustainable.

“If the Fed raises rates sufficiently to assure financial stability, there is a risk that the economy will slow too much,” Summers wrote.

President Donald Trump tapped Powell in November, deciding not to give Yellen a second four-year term.

On Friday, Yellen admitted she was disappointed about not getting reappointed.

“I would have liked to serve an additional term and I did make that clear, so I will say I was disappointed not to be reappointed,” she said on PBS NewsHour.

Powell, who turned 65 on Sunday, is a lawyer by training and would be the first Fed chair without a Ph.D. in economics in 30 years. He has a reputation for being a centrist and quiet team player

Even though Powell was confirmed by the Senate on Jan. 23, he waited until Monday to take the reins at the central bank, giving Yellen a full four-year term as chairwoman.