Jerome Powell, Trump's multi-millionaire pick for Fed chief

[WASHINGTON] Jerome "Jay" Powell, the Republican former investment banker tapped by President Donald Trump to replace Janet Yellen at the helm of the US Federal Reserve, could be the richest person to ever fill the role.

Mr Trump's choice of Mr Powell - who is not a trained economist - represents a departure from longstanding precedent, but also sends a signal to markets that the White House intends to maintain a measure of continuity with the Yellen era, which saw rising prosperity and cautious interest rate increases.

The 64-year-old also is succeeding the first woman ever to lead the Fed, who in contrast to Mr Powell spent her career as an academic economist and in various roles at the central bank.

Mr Powell's profile is unusual, as an attorney rather than an economist whose track record includes serving at the Treasury in Republican administrations.

He has voted with the majority of Fed members since his appointment by Barack Obama in 2012, and was seen as a centrist, unlikely to pursue steep rate hikes.

But as a Republican, Mr Powell probably is more amenable to the Trump administration's deregulation agenda.

"There is certainly a role for regulation but regulation should always take into account the impact that it has on markets," Mr Powell said in an address early last month.

"More regulation is not the best answer to every problem."

CONSENSUS BUILDING

Like former Fed governor Daniel Tarullo, Mr Powell has said he is open to amending restrictions on so-called proprietary trading, in which banks make speculative investments with their own funds.

Mr Powell has meanwhile echoed the Trump administration's views on the urgent need to spur faster economic expansion, with the White House vowing to return to annual growth of three per cent or better.

After joining the Fed, Mr Powell was present in 2013 when then-chair Ben Bernanke began to taper down the central bank's massive bond-buying stimulus programme implemented during the global financial crisis.

The Fed is now starting to shrink those bond holdings under Ms Yellen's direction.

Mr Bernanke later wrote of Mr Powell's "reputation as a moderate and a consensus builder."

Prior to coming to the central bank, Powell was a scholar at the Bipartisan Policy Centre, a think tank, and reportedly worked to convince fellow Republicans not to push the United States over the brink of default during a fight among lawmakers over statutory borrowing limits.

A Washington native, Mr Powell previously served as assistant secretary of the US Treasury in charge of financial institutions under US President George H W Bush in 1992.

Mr Powell would be among the wealthiest central bank chiefs ever to lead the Fed. He disclosed a net worth earlier this year of between US$20 million and US$55 million after nearly a decade as a partner at the Washington-based private equity giant Carlyle Group.

Mr Powell's fellow Fed Governor Randal Quarles, a recently confirmed Trump nominee in charge of banking oversight, also is a former Carlyle Group partner.

AFP