Powell or Brainard Will Struggle to Align Hikes With Hiring Goal

davfor

Perhaps some portion of the population that "retired" during the pandemic will stay retired long term. And, perhaps some younger people who were previously in dual worker households and who opted out of the labor force during the pandemic will remain at home long term thereby causing the the number of single worker households to increase. I suspect both of those changes in the composition of the workforce may be happening. Those issues will factor into the Fed's decision about when to start raising interest rates. That decision will also need to wrestle with the Fed's maximum employment mandate:

Complicating the decision-making and posing a challenge for communications is the much-hailed revamping of the central bank’s strategy in August and September 2020.

Chair Powell, Governor Brainard and colleagues agreed then it would “be appropriate” to keep borrowing costs ultra-low until maximum employment was reached, which they redefined as a “broad-based and inclusive goal.”

One problem: The Fed’s policy framework doesn’t address how officials should balance risks between inflation and employment, an omission drawing criticism from economists such as Harvard University’s Jason Furman, who led former President Barack Obama’s Council of Economic Advisers.

Powell or Brainard Will Struggle

yogibearbull

Predictit has Powell at 69%, Brainard 29%. Biden better decide soon to get Senate confirmation by Feb 2022. My guess is that it may be tied to the votes for soft-infrastructure bill.
https://www.predictit.org/markets/detail/7398/Whom-will-the-Senate-next-confirm-as-Chair-of-the-Federal-Reserve

msf

Here's a different take. The op ed writers agree that the decision is political. But they feel that the political calculation comes down to bipartisanship (Powell (R)) vs. greater regulation that would factor in climate change (Brainard (D)).

They also note that aside from Jimmy Carter, every incoming president since Truman but one reappointed the sitting chair for at least one term.

https://www.nytimes.com/2021/11/21/opinion/federal-reserve-biden-powell-brainard.html

Mitchelg

Both are disasters.

davfor

The link @msf posted did not work for me. But, this one did:

Biden's Pick

msf

Thanks. I've fixed the link.

When one changes the font in a link (as I did to acknowledge that this is an opinion piece, not a news story) one needs to insert the link explicitly. MFO doesn't handle it automatically. And I erred by stripping out not only the font formatting but a part of the URL.

davfor

Biden Keeps Powell as Fed Chair, Elevates Brainard to Vice Chair: Live Updates