Powell Favored as Next Federal Reserve Chairman

In late breaking news, Federal Reserve Governor Jerome Powell is seen as the leading contender to become the next Fed Chairman. According to Politico, “Federal Reserve Governor Jerome Powell is the leading candidate to become the chair of the U.S. central bank after President Donald Trump concluded a series of meetings with five finalists Thursday, three administration officials said.”

However, the article also states that after meeting with Janet Yellen for about a half hour today, a final decision has not been made.

Considered by many to have a very similar dovish tone to the current Chairperson, Janet Yellen, Powell is favored by Stephen Mnuchin, the Treasury Secretary who is orchestrating the search for the next Fed chairperson on behalf of the administration.

Currently, there are five contenders on Trump’s short list, and it is believed that Powell would represent the candidate of least resistance.

“While the overwhelming view among Republican and Democratic lawmakers is that they are keeping an open mind to all of the candidates, the others have drawbacks with one party or the other that Powell lacks.”

As of 415 EDT, gold futures are trading up $8.00 at $1291 per ounce. This is roughly a double gain being seen today before this news hit the wire services. Prior to this news story, the positive uptick in gold prices was a reflection of a marginally weaker dollar, lower Treasury yields, and a global equities markets softening slightly after trading to all-time highs.

In a fast market scenario, gold prices are reacting sharply to the news that Powell might be the next Federal Reserve Chairman. While he represents a candidate that will offer stability to the current strategy of the Fed, he is also perceived as one of the more dovish candidates of the five on Trump’s short list. As such, the uncertainty of who will head the Federal Reserve has diminished, and it has been that uncertainty that has weighed heavily on gold prices recently.

Wishing you as always, good trading,