The new head of the Federal Reserve Jerome Powell was sworn in this week. There is agreement that it is a bit early to ponder fully the legacy of the departing Chair Janet Yellen, first woman to have occupied the position of most influential world banker. Nonetheless, the incoming Chairman receives an economy that is growing moderately, at around 2.5 percent, with low inflation and the lowest unemployment rate, of 4.1 percent, registered in 17 years.
The unemployment figure with low inflation are the most noticeable legacy of Chair Yellen’s tenure. She resisted premature pressures to dismantle the monetary stimulus which sustained the economic reactivation. Then, in contrast with other central banks which tightened too soon, interest rates were gradually increased and the central bank’s portfolio was slowly reduced, without generating turbulence. Meanwhile, consumer confidence and the markets reached new highs, which are expected to experience a correction as interest rates return to normal levels.
Finally, the last decision adopted by former Chair Yellen, before joining the Brookings Institution, was emblematic of her tenure. The Federal Reserve cited “widespread consumer abuses” at Wells Fargo, in announcing that the third largest US bank had agreed to replace four board directors and limit its expansion without previous authorization from the regulators. In a statement issued last Friday, Chair Yellen explained “we cannot tolerate pervasive and persistent misconduct at any bank.”
*International analyst and consultant, former Director ECLAC Washington Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
