Law takes over global finances
Leer en Español: Jerome Powell: el hombre más poderoso del mundo
Jerome Powell is the lawyer and investment banker who has been appointed as the Chair of the Federal Reserve of the United States after Donald Trump quoted the importance of having a “strong, sound and steady leadership” in the most important Central Bank. It is the first time in 40 years that a lawyer, and not an economist, takes office in one of the most important position when it comes to the world’s finances.
Powell was born in 1953 in Washington D.C. and holds an A.B. degree in politics from Princeton University and a JD law degree from Georgetown University. His professional activities include experience in charitable institutions such as The Nature Conservancy and the Bendheim Center, while most of his career he worked in law firms such as Davis Polk & Wardwell, and investment banks such as Dillion, Read & Co and The Carlyle Group.
Former president Barack Obama nominated the lawyer as part of the Federal Reserve Board of Governors on December 2011 and was re-appointed on June 2014 for a 14 year term that will end on January 31, 2028. Jerome Powell’s monetary policy is dovish instead of hawkish, which means that keeping a low unemployment is considered more important than sustaining a low inflation. Today’s U.S. unemployment figures are the lowest in 17 years.
The U.S. Monetary policy sets the interest rate for the production of the U.S. Dollar, which partially determines the long term debt cycle throughout the global economy. Every time the American interest rate goes up, so does the incentives for more expensive worldwide public lending. Following the 2007-2009 economic recession, the Ben Bernanke’s Fed reduced interests rate nearing zero; it is Jerome Powell’s job to maintain their consistent rise following Janet Yellens’ mandate.
Powell’s first action in office will be one only a lawyer could do. The LIBOR interest rate is a British benchmark rate for short-term loans among banks, which has been manipulated by banks such as Barclays and Deutsche Bank, who have endured penalties around 400 million dollars. Although strong controls have been enforced, further regulation will be enforced from his office. Jerome Powell is merciless around illegality, as it was proven during the Salomon Brothers false U.S. Treasury bid scandal.
Latin American Post | David Eduardo Rodríguez Acevedo
Copy edited by Susana Cicchetto