UPDATE — 11/20, 8:48 p.m. EST: Federal Reserve Chair Janet Yellen informed President Trump in a letter Monday she will resign from her seat on the Board of Governors once the next central bank head officially assumes the position in 2018.
“I am gratified that the financial system is much stronger than a decade ago, better able to withstand future bouts of instability and continue supporting the economic aspirations of American families and businesses,” she wrote.
“The economy has produced 17 million jobs . . . over the past eight years and . . . is close to achieving the Federal Reserve’s statutory objectives of maximum employment and price stability.”
President Trump announced Federal Reserve board member Jerome Powell as his choice to succeed Janet Yellen as the central bank’s chair on Thursday.
Mr. Powell, 64, has served on the Fed’s Board of Governors since May 2012.
“If I am confirmed by the Senate, I will do everything in my power to achieve our congressionally assigned goals of stable prices and maximum employment,” he stated after being introduced in the White House Rose Garden.
Trump’s choice of Powell ends weeks of speculation he would replace Yellen. It also breaks a four-decade streak of renominating a serving chairman of the Federal Reserve, raising eyebrows as to why Yellen was passed over.
Heritage Foundation economist, Stephen Moore, explained that the president’s decision is rooted in the belief that America needs to loosen monetary regulations to stimulate growth.
“The job of the Fed chair is not just to be the lead person on monetary policy. This is the chief economic voice of the nation,” Moore said. “(Yellen’s) not with the program.”
Ms. Yellen, who was appointed by former President Obama in 2013, released a statement praising Powell and vowed to facilitate a smooth transition. Yellen’s term expires at the end of January 2018.
Then-candidate Trump criticized Yellen’s Fed policies numerous times during the 2016 campaign, but more recently praised her efforts over the past four years.
“You like to make your own mark, which is maybe one of the things she’s got a little bit against her, but I think she is terrific. We’ve had a great talk and we are obviously doing great together, you look at the markets,” the president said in a Fox Business interview.
Treasury Secretary Steve Mnuchin told Bloomberg TV Wednesday that Yellen has yet to decide if she’ll remain with the Fed after her term as chair expires on Feb. 3, 2018.
A native of Chevy Chase, Md., Powell earned an A.B. in politics from Princeton University and a law degree from Georgetown University in 1979.
Following law school, Powell briefly clerked for Judge Ellsworth Van Graafeiland and worked with two New York law firms before moving to investment banking firm Dillon, Read & Co., where he focuses on mergers and acquisitions.
In 1990, Powell joined the Bush administration, serving as Undersecretary of the Treasury for Domestic Finance. Following the change in administrations, Powell returned to Wall Street, joining Bankers Trust. Powell rejoined Dillon, Read shortly after.
Powell later founded his own private investment firm, Severn Capital Partners and in 2008, became managing partner with Global Environment Fund, an private equity firm specializing in sustainable energy.
In 2011, Powell and Jeremy Stein were nominated by former President Obama to the Federal Reserve Board of Governors. Powell’s board term expires on Jan. 31, 2028.
Powell remains a resident of Chevy Chase and sits on the board of several local charitable groups concentrating on education in impoverished communities and nature conservancy.
Editor’s note: This article has been updated.
[RollCall] [AP] [Photo courtesy Getty Images/Reuters via CNBC]