74 People Selected in 82-Year History to Serve on Federal Reserve Board - Paper Example

Over the past many years, there are more than 74 people who have been selected in the 82-year history to serve on the board of governors. Further, it is essential to note that this group has been significant in playing the role of fostering the economic growth of the country. The established stability in noninflationary growth has been the focus and goal for the policymakers on monetary perspectives. It has been the ideology of inception to improve the modern federal reserve that was started in the middle of the 1930s. Many policymakers over this period have been successful, and closer to achieving this goal is many eras of different leaderships in charge. Besides, the chairperson position's reflection is critical since it reflects on the experience in sharing the thoughts and current monetary policy direction that needs to be considered. Notably, a question has been on the mind to understand why the monetary policy is deemed to be more successful under the selected Chairman of the reserve chairmen than others. The focus of this paper will be demonstrating the determinants of policy success on the Federal Reserve based on the professional biography of the Chairman of the board.

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The appointment of the new Chairman of the Federal Reserve, Jerome Powell, is a trained lawyer by profession (Long). Before this appointment, he served as a member of the board within the Federal Reserve. He had been a visiting scholar at the renowned Bipartisan Policy Center, an institution that is known for addressing issues on federal and problems that are relating to the state fiscal elements in the state (Appelbaum). Powell had also had or served as an assistant secretary in the past governments under the treasury department in the President George Bush era. His responsibility was on the management of policy on financial institutions the understanding of the treasury debt market. The work experience to gain such responsibility began when Powell was a lawyer and investment banker in New York City (Long). The role of being the chairperson of the board of governors of the Federal Reserve of the country is a task that he had to manage issues relating to economic growth is stabilized in various measures.

Over the past decades, the analysis on the record of the Federal Reserve has been to discover the belief of the policymakers and their reason for choosing their action. The realistic desire is to match the clear implications of such links on the existing ideas and outcomes of the policies determined by the Chairman of the board. The primary criteria to be followed need to be on the beliefs of the economy of the country. Based on these analyses, the current Chairman of the Federal Board of governors is highly skilled in this sector and financial management (Greenhouse). Jerome Powell is the latest individual selected by President Trump after facing scrutiny if the Senate banking, housing, and Urban Affairs committee hearings. Mr. Powell, a Republican, was the leading voice and the most renowned person in the matters of the Fed's internal debates in the country. Substantially, this was attributed to the fact that he preferred to raise his concerns, opinions, and ideas in private conversation rather than public speeches. He has voted for every policy decision since joining the Fed, including four interest rate increases. He is also known to have supported the Fed’s decision to unwind the bond-buying program in place during and after the 2008 financial crisis.

There are various roles of ideas that have been determined to highlight policies and outcomes under different chairpersons since the inception of the country (Greenhouse). These policies have ranged from the views on the price of a stability emphasis. At this point, the board was convinced to raise the discount rate, notwithstanding the experienced pressure from the administration that was opposing the move. Based on the career record of Jerome Powell in the field of financial management ranging from the private sector to the government institutions, many expectations are ahead of his role as the chair of the federal reverse boards of governors. Other than policy development to improve economic growth, the characters as a chairman are to be active and visible when it comes to providing leadership roles to execute the central bank's mandate. There is also a need to focus on pushing for maximum employment creating initiatives in the country, identifying long term interest rates of the moderate range.

Powell will face various aspects in his role as the Chairman in the governors of federal reserves, especially in transforming two elements, which consist of existing pressure and challenges and the possible future outcomes. Correcting histories on postwar and shape the social, economic, political, and financial to match how the institution, as well as legal foundations, would operate to improve the country's economic growth is one of the focus for the transformation ahead of him in the long term. However, this can be categorized into the pressure under the management and delegations to achieve these goals (Juan and Cherrier 10). The experience of dissatisfaction with the policy orientation is one of the challenges that Powell has to deal with in his role as a chairperson. This issue is explained in the context that the established monetary policies do not exhibit or lack the effectiveness that can assist in controlling the expenditure for inventories of business and capital equipment in the country.

Moreover, in most cases, many critics also consider that the Fed was sustaining the economy's growth through high rate interest maintenance. The other challenge that Powell will always experience is the dissatisfaction with the process of decision making on policies by the Fed (Juan and Cherrier 13). This cannot be considered as a valid issue. To some extent, many critics have termed it to be a concern creating short-termism and lack of structure, leading to a lack of direction in connective directives and implementation of policies. The results of this may include the development of transparency in compiling communication between different committees and commissions. The other concept in the underlining critic is that there were limited scientific proofs shared on monetary policy. Substantially, this was after more than 50 years have not provided necessary rational foundations for the policy-oriented despite numerous debates. The theory that the Federal Open Market Committee required was based on a systematic and testable need to determine the essential mechanism that connects monetary policy operations and the supply of money (Juan and Cherrier 15). There are many debates on these issues for many decades leading to limited consensus in place by the majority of chairmen on the federal reserve in the country. Many economists did not agree on the concept that monetary policy would influence the real economy as an adequate instrument for policy change. This would be one of the factors most economists and business industries looking forward to possible changes (Robbins). Additionally, the use of scientific analysis should, therefore, be addressing the significant roles of the chair in setting monetary policies, being in the face of the institution, and making the necessary decision making.

There are various aspects that Powell's appointment as the Chairman of the federal reserve should be considered. The monetary policy and economy of the year 2019. Many elements in the monetary outlook have changed considerably following the action taken by Powell in is the position. For instance, the rate of inflation has been lowered while the forecast for unemployment and the gross domestic product is nearly unchanged (Powell 4). Further, these changes have been supported by households' spending that has improved significantly to about 70% under the watch of Powell. The healthy job market has influenced the development of more robust housing spending, the possibility of rising incomes and consumer confidence in the country. There were risks that the economy faced at the beginning of the year despite appearing to be robust in growth. Foreign growth slightly reduced at some point, causing panic to business transacting in the international market (Powell 6). Nonetheless, the main deliverables that have been experienced over the short term of Powell being the Chairman as the household sector's strength.

The other issue, as discussed to be challenging on the operation of Powell as the Chairman, is the determination of how policies are affecting the economy and other political issues within the country. The policy interest rate is often used to help achieve the country's goals to enhance maximum employment and stabilize prices across different economic sectors. These benchmarks have successfully worked out, but retaining other aspects of fiscal policies has been challenging to achieve in the short term (Robbins). The likely effort that should be enhanced is to stabilize the global developments to provide insurance against the existing risks experienced by the progressive easing of monetary policies. In this case, some of the adjustments that need to be undertaken consist of applying necessary and most viable measures to create a good reputation in the international market.

The appointment of Powell is also significant based on his advocacy reputation on monetary reforms over many years. The decision for President Trump selecting Powell is based on the highlights and the willingness to compromise the need to limit debt. The speech made by Powell upon appointment was objective and had a distinctive direction that would ensure regulatory reforms are achieved (Robbins). The scope of these objectives would mainly focus on overvaluing the regulatory system at large to control the economy and development of the governing policies. One of the significant issues in the new regulations to be implemented by Powell from his speech was to primarily simplify the regulation mainly for small and medium banks by ensuring that their cycles are extended for living with the possible submission of annual to every two years (Powell 8). The key fundamentals, in this case, were to determine relevant topics on interests. The other objective was to reassess the implementation of fiscal policies that influence employment and global trade and risks involved by the country. The reassurance was significant for strong economic growth and comfortable participation of the local businesses in these markets (Robbins). The main issues in foreign markets are the determination of adequate financial sustainability and private investment in the United States. Lastly, embracing transparency that required testing for a comprehensive capital analysis and possible review is also an objective that Powell is looking to improve.

Conclusion

In general, Powell's legacy will be determined by his performance in the role of a chair through the development and action taken to strengthen economic growth. Notably, on wall street and Washington, Powell is marked to represent the safe choice of president Trump selection. This comes on the choice of being appeased by the hardcore of republican representation without politicizing the federal reserve as an institution. Besides, Powell's ideal knowledge and connection, both in politics and business, make it comfortable to step up as a top job.