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Trump's Fed Chair Nominee and the Effect on Financial and Gold Markets

Trump's Fed Chair Nominee and the Effect on Financial and Gold Markets
(Dollar Photo Club)
 

By    |   Friday, 03 November 2017 03:31 PM

President Donald Trump’s selection for the next Chairman of the Federal Reserve System’s Board of Governors won’t exactly rock the boat, but that could be good news for gold investors.

Trump’s selection of current Fed Governor Jerome Powell follows months of public speculation about the possible candidates.

Current Fed Chairman Janet Yellen becomes the first chairman in decades not to be reappointed for a second four-year term.

Financial markets greeted Powell’s appointment happily, as it is believed that he will be more dovish than two of the other finalists, former Fed Governor Kevin Warsh and Stanford University economist John Taylor.

While a dovish Fed may mean a slower pace of interest rate hikes, in the long term that could be good for gold, according to Goldco CEO Trevor Gerszt.

“A John Taylor-led Fed would have been seen as more hawkish, more financially responsible, and in the short term might have meant a pullback in gold prices,” said Gerszt, also a Newsmax Finance Insider. “But in the long term, Powell’s policies will just continue Yellen’s. Powell had voted and supported Yellen during her tenure as the Federal Reserve’s Chair.

Because of Powell’s alignment on all issues with Yellen, both the Fed’s friends and foes view a Powell chairmanship as a continuation of Yellen’s policies. However Powell has his critics who point out that unlike his immediate predecessors, Powell is a lawyer, not a PhD-economist, the first non-economist to head the Fed since the disastrous tenure of G. William Miller from 1978-79. However if confirmed, Powell would be the first Fed Chairman to come from an investment banking background.

That has Wall Street overjoyed, as they hope it will lead to a more understanding regulatory regime in addition to business-friendly monetary policy. “The expectation is that Powell will be more understanding of Wall Street’s needs. Markets hope that translates to more dovish monetary policy, less financial regulation, and a continuation of the stock market boom,” according to Andrew Packer, Newsmax Editor of the Resolute Wealth Report.

Packer, also a Newsmax Finance Insider and who has just written a new book on gold “Trump $5,000 Gold,” warns that the “continuation of a very accommodative Federal Reserve monetary policy along with a huge Trump tax cut and eventual passage of infrastructure spending next year, could easily serve to weaken the U.S. dollar. That could be highly inflationary and may ignite a new bullish market in gold, precious metals and commodities.

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President Trump's selection for the next Chairman of the Federal Reserve System's Board of Governors won't exactly rock the boat, but that could be good news for gold investors.Trump's selection of current Fed Governor Jerome Powell follows months of public speculation...
trump, fed, chair, nominee, financial, gold, markets
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2017-31-03
Friday, 03 November 2017 03:31 PM
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