{"id":230981,"date":"2021-11-22T21:03:46","date_gmt":"2021-11-22T21:03:46","guid":{"rendered":"https:\/\/aptuscapitaladvisors.com\/?p=230981"},"modified":"2023-02-09T21:03:42","modified_gmt":"2023-02-09T21:03:42","slug":"powell-is-renominated","status":"publish","type":"post","link":"https:\/\/aptuscapitaladvisors.com\/powell-is-renominated\/","title":{"rendered":"Powell is Renominated!"},"content":{"rendered":"

This morning, President Biden renominated the current Fed Chairman, Jay Powell, for another 4-year term. Lael Brainard, who was also in the running, will become the next Vice Chair, replacing Richard Clarida. This keeps consistency of the top dog at the Fed during a time of heightened inflation and increased monetary policy. Biden praised Powell\u2019s leadership throughout the pandemic and his swift actions to help rescue the economy. Now his task will be protecting the consumer against inflation, as the Fed\u2019s second mandate, full employment, will continue to take a back seat.<\/p>\n

 <\/p>\n

Market Reaction<\/em><\/strong><\/h5>\n

 <\/p>\n

Following the announcement, Treasuries sold off (yields higher), specifically on the long end of the curve while the dollar strengthened, and equities lifted higher. With a Powell-led Fed, we expect the speed of the QE taper to follow the data, likely speeding up if inflation prints continue at the pace of the October print with interest rate hikes to shortly follow the taper (June at current pace). The market believes this action will keep the Fed in control of inflation. While the market is expecting a more hawkish response to current inflation, time will tell if it will be enough, as Powell is well established in the dovish camp of FOMC policy.<\/p>\n

 <\/p>\n

Aptus Reaction<\/em><\/strong><\/h5>\n

 <\/p>\n

The move to choose Powell proves the reality of inflation and while the selection of Powell over Brainard was likely difficult politically for Biden, given the push from progressive Democrats, we believe it was the right move. Biden likely delayed the nomination as he met with senators across the political spectrum to assess whether Brainard could be confirmed for the position. Ultimately, he concluded that it would be difficult to push her across the finish line. Markets made their statement of wanting to see the Fed do its job, i.e., focusing on addressing monetary policy, employment, and inflation rather than political agendas such as climate change and income inequality (market driven decisions vs politically motivated decisions). We see the renomination as a clear message from the markets that the best person for the job is already there.<\/p>\n

 <\/p>\n

Moving Forward<\/em><\/strong><\/h5>\n

 <\/p>\n

We expect Biden to nominate the remaining open seats (3 open seats) in early December. As progressives are likely displeased with Powell\u2019s renomination, we wouldn\u2019t be surprised to see these seats influenced towards more aggressive progressives. Also, no decision has been made on the Vice Chair of Supervision which could line up well with Brainard given her pro-regulation stance. We will also get our last look at FOMC minutes for 2021 which could enlighten the markets on the pace of tapering considering the continual inflationary pressures present. Given Powell at the helm, we know that he will continue to focus on data-driven decisions, thus, he will have a lot more clarity before he has the ability to change the cadence of tapering in January.<\/p>\n

 <\/p>\n

Disclosures<\/strong><\/p>\n

 <\/p>\n

Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The information contained herein should not be considered a recommendation to purchase or sell any particular security. Forward looking statements cannot be guaranteed.<\/em>\u00a0<\/em><\/p>\n

This commentary offers generalized research, not personalized investment advice. It is for informational purposes only and does not constitute a complete description of our investment services or performance. Nothing in this commentary should be interpreted to state or imply that past results are an indication of future investment returns. All investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with an investment & tax professional before implementing any investment strategy. Investing involves risk. Principal loss is possible.<\/em><\/p>\n

Advisory services offered through Aptus Capital Advisors, LLC, a Registered Investment Adviser registered with the Securities and Exchange Commission. Registration does not imply a certain level or skill or training. More information about the advisor, its investment strategies and objectives, is included in the firm\u2019s Form ADV Part 2, which can be obtained, at no charge, by calling (251) 517-7198. Aptus Capital Advisors, LLC is headquartered in Fairhope, Alabama. ACA-2111-9.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This morning, President Biden renominated the current Fed Chairman, Jay Powell, for another 4-year term. Lael Brainard, who was also in the running, will become the next Vice Chair, replacing Richard Clarida. This keeps consistency of the top dog at the Fed during a time of heightened inflation and increased monetary policy. Biden praised Powell\u2019s […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","inline_featured_image":false,"footnotes":""},"categories":[20,130],"tags":[],"class_list":["post-230981","post","type-post","status-publish","format-standard","hentry","category-blog","category-macro-updates"],"yoast_head":"\nPowell is Renominated! - Aptus Capital Advisors<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aptuscapitaladvisors.com\/powell-is-renominated\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Powell is Renominated! - Aptus Capital Advisors\" \/>\n<meta property=\"og:description\" content=\"This morning, President Biden renominated the current Fed Chairman, Jay Powell, for another 4-year term. 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