Eswar Prasad on a Fed in Trump's Image

The video discusses the leadership transition at the Federal Reserve, focusing on Jerome Powell as a candidate for continuity in monetary policy. It questions why Janet Yellen is not being reappointed despite her performance. The discussion also touches on the political influence of Trump's administration on Fed appointments, contrasting tradition with the desire for change. The importance of appointing a credible leader capable of handling future financial challenges is emphasized, highlighting the potential impact on both domestic and international markets.

What is the main reason Jerome Powell is considered a leading candidate for the Fed chair position?

• He has a history of opposing Janet Yellen's policies.

• He represents a significant change in monetary policy.

• He offers continuity in monetary policy.

• He is known for his strict adherence to Trumpian policies.

Why might there be concerns about the new Fed chair appointments under Trump's administration?

• They are legally required to follow the previous chair's policies.

• They might prioritize Trumpian policies over the Fed's mandates.

• They are chosen based on public opinion polls.

• They are expected to make drastic changes to the economy.

What is the traditional practice regarding the reappointment of Fed chairs?

• Fed chairs are reappointed based on public voting.

• Fed chairs are always reappointed by the succeeding president.

• There is no legal requirement to reappoint the previous Fed chair.

• The reappointment is decided by the Federal Reserve Board.

What is a key challenge the new Fed chair might face according to the discussion?

• Expanding the Fed's influence in domestic markets only.

• Increasing the interest rates significantly.

• Reducing the unemployment rate to zero.

• Implementing policies that are unfavorable to President Trump.

Why is credibility important for the new Fed chair in international markets?

• To increase the Fed's control over international banks.

• To ensure the Fed's policies are accepted globally.

• To prevent any political influence from other countries.

• To maintain the stability of the global financial system.