TOKYO – Is Jerome Powell the best man for the worst job in global finance? That’s US President Joe Biden’s take as he gives Powell a second term as Federal Reserve chairman.
Yet the real question, and the one that might matter the most, is: How is Asia placed for four more years of Powell’s leadership?
For sure, the appointment ends the suspense that has distracted markets in recent weeks. Biden had been toying with the idea of replacing Powell with Lael Brainard, a Fed governor who’s known to be even more dovish policy-wise.
This decision, for better or worse, removes the uncertainty factor. Asia, though, might not relish the idea of the Powell era getting more room to roam.
Firstly, Powell is a political pushover. Since 2017, the Fed’s long-cherished independence from legislative meddling was, well, trumped. In February 2017, then-US president Donald Trump replaced then-Fed chief Janet Yellen with a non-economist, a first in more than 40 years at the world’s most powerful central bank.