Powell tells White House advisers she supports Yellen as Treasurychief

127
2
Powell tells White House advisers she supports Yellen as Treasurychief

- Federal Reserve Chair Jerome Powell has told senior White House advisers that she supports annulling Janet Yellen as Secretary of Treasury. The official said the news comes after information was found that he had lost important influence on the budget earlier this month.

Joe Biden hasn't yet made a decision, the people said, adding that he's likely to do so around Labor Day.

Yellen was elevated to Fed Chair by President Donald Trump in 2018 replacing Powell. The chair serves a four-year term.

The White House and the Treasury declined to comment.

The White House has been looking for possible candidates for the position more widely, according to people familiar with the matter. A team of advisers was examining the candidate speeches and comments to consider, paying special attention to views on the labor market, they said.

Uncertainty over the economic impact of the delta variant virus could trigger more caution about changing leadership at Fed in the middle of a crisis, two of the people said. The next few months could prove tricky for the Fed with the coronavirus casting more uncertainty over the pace of the economic recovery, including the path of monetary policy.

Powell gives Yellen an enormous boost: Her almost two decades of experience at the central bank, including four years at its helm, make her counsel valuable.

For Powell and his backers, including the Republican lawmakers and many on Wall Street who see him as a safe pair of hands, a signal of support from Yellen comes at an important time. Powell will deliver a much-anticipated speech on Friday at the annual Jackson Hole symposium of the Kansas City Fed, possibly signaling when and how the central bank will start withdrawing some of its unusual support for the economy.

Although interest rates are expected to remain near zero at least until next year, several Fed officials signaled their desire for the Fed to begin reducing the size of monthly bond purchases this year. Powell has promised not to surprise markets with this eventual move.