Changeover in the Fed

The Federal Reserve is imposing more penalties on Wells Fargo, freezing the bank’s growth until it can prove it has improved its internal controls. In addition, bank agreed to replace four board members.

It’s the latest blow against the San Francisco bank that has had its reputation tarnished by revelations it opened phony customer accounts and sold auto insurance to customers who did not need it.

The new penalties were announced late Friday on Fed Chair Janet Yellen’s last day at the central bank.

  TPM

Yes, Janet is leaving.

“We cannot tolerate pervasive and persistent misconduct at any bank,” Yellen said in a statement.

Oh, I think the year 2008 disproves that statement.

Anyway. I dread to find out who Trump will put in Yellin's place.

US President Donald Trump has named Jerome Powell, a current Federal Reserve governor and former finance executive, as his choice to replace Janet Yellen as chair of the world's most powerful central bank — ending months of speculation about who would take charge.

[...]

Powell is seen as a relatively safe, Wall Street-friendly choice at a crucial time for the central bank. The Fed has begun the process of raising interest rates from post-recession lows and is unwinding its massive asset-buying program — a response to the financial crisis a decade ago.

[...]

Trump's decision not to grant Yellen a second term as chair is a break with the recent tradition of presidents nominating sitting chairs to a second term, even when they have different political affiliations. Yellen is a Democrat and served in the administration of former US President Bill Clinton. Her term ends in February.

  Business Insider

Oh, God, a democrat!

"He had a very favorable view of her but in the end he thought governor Powell would be the best choice," the senior official when pressed about the reasoning behind the unusual change of guard.

Right. Sure.

Still, Powell does offer continuity of sorts, and in that sense is the best alternative to Yellen among those who were on Trump's shortlist of candidates. Other candidates reportedly considered included White House adviser and ex-Goldman Sachs executive Gary Cohn and Kevin Warsh, a former Fed governor and Morgan Stanley banker.

The selection was a drawn-out affair conducted in Trump's very public style. The president tweeted as he met candidates, and last week posted and an Instagram video previewing the decision.

You can't really say Trump governs. He just conducts TV ratings shows.

The appointment of Powell, who is among the wealthiest members of the Fed, is likely to be well received on Wall Street, which will see him as a friendly face on possible deregulation but also, importantly, as somewhat predictable on interest-rate policy at a key time for the central bank.

[...]

Powell, a 64-year-old Republican, was appointed to the Fed's powerful Washington-based board of governors in 2012 by US President Barack Obama.

I bet Trump doesn't know that.

[Powell] is likely to maintain the Fed's course of gradual but cautious rate increases, with an eye to an inflation rate that continues to undershoot the central bank's 2% goal. This points to economic activity and a labor market still running below their potential, a point highlighted by weak wage growth for most Americans.

Wait, what? Weak wage growth? Surely not. That's not the picture Trump has been painting.

Powell worked in private industry much of his life and was a partner at Carlyle Group from 1997 to 2005.

The Carlyle Group. The Carlye Group. Where have I heard that name before? Oh, yeah.

 ...but hey, do what you want...you will anyway.