Jerome Powell, if confirmed by the Senate to be the next Federal Reserve chairman, will likely follow the path his predecessor has set, former Fed Vice Chairman Alan Blinder said Friday.
“Janet Yellen already as well as before she leaves has set the course both for interest rates as well as for the diminution of the size of the balance sheet,” said Blinder, today an economist at Princeton.
“Jay Powell, unless he’s crazy, as well as he’s not, can be just going to continue going down that will path,” Blinder added in an interview on CNBC’s “Squawk on the Street.”
President Donald Trump on Thursday nominated Powell, a Fed governor as well as a former investment banker, to lead the central bank after Yellen’s term expires in February. Powell has worked alongside Yellen for the past several years, backing her direction on monetary policy.
When asked whether Powell would certainly have a tougher or easier job than Yellen, Blinder said within the near term This specific can be “going to be exactly the same. This specific’s business as usual.”
“The economy seems to be on a pretty steady track,” Blinder said. “Not what the ‘Trumpies’ would certainly like This specific to be, nevertheless a not bad pace of growth, including the pace of job growth as well as no signs of an acceleration of inflation.”
He spoke after the Labor Department said Friday that will the economy added 261,000 jobs in October, a pickup coming from September, as well as the unemployment rate dropped to 4.1 percent.
Also on “Squawk on the Street” was Jan Hatzius, chief economist at Goldman Sachs, who said he expects the fresh Fed won’t be “dramatically different,” even if Trump makes additional appointments.
“I wouldn’t expect a major change,” Hatzius said. “I think Jay Powell as chairman can be not going to be dramatically different.”
“This specific can be a large committee. Decisions are made on a committee basis,” he added.