The developments of the last few days reinforce my view: : If Chair Powell's objective is to safeguard the Fed's operational autonomy (which I deem vital), then he should resign.
Nor is it a first best, which is simply not attainable.
Yet, it's better than what is playing out now – growing and broadening threats to Fed independence – and will undoubtedly increase should he remain in office.
As to market reaction, most of the frequently mentioned candidates to replace Chair Powell would be able to calm any potential market jitters.
El-Erian Calls On Powell To Resign To Protect Fed
Federal Reserve chairman Jerome Powell should step down in order to protect Fed independence, according to Mohamed El-Erian.
El-Erian is the former chief executive of Pimco and Harvard University’s investment arm. He is currently president of Queen’s College in the U.K. and a columnist for Bloomberg.
“If Chair Powell’s objective is to safeguard the Fed’s operational autonomy (which I deem vital), then he should resign,” El-Erian said in a post on X on Tuesday.
Powell has been severely criticized in recent months by President Donald Trump, who has nickednamed the Fed chairman “Too Late” over his refusal to cut interest rates. In recent weeks, the Trump administration has broadened the criticism to include the Fed’s renovation of its buildings in Washington, D.C. and Powell’s congressional testimony about the project.
On Monday, Treasury Secretary Scott Bessent criticized the Fed for “mission creep.” He also questioned the role of Fed economists, describing the Fed’s massive army of analysts as “UBI for academic economists.” El-Erian’s post seemed to respond to these lines of attack.
“This morning, US government criticism of both Federal Reserve Chair Powell and the institution itself has broadened to include ‘mission creep’. and the effectiveness of other officials,” El-Erian said.
========================================================================
Last week, the UK's delicate economic situation was underscored by challenging employment and inflation data.
This morning, the fiscal picture deepened those concerns:
- Driven by increasing debt service payments, this represents an almost £7 billion increase from last year and marks the second-highest June borrowing on record, surpassed only by 2020.
- Yet, prolonged deliberation and uncertainty surrounding the budget's contents risk exacerbating current economic headwinds, potentially leading to even more subdued growth.
No comments:
Post a Comment