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New Fed chair expected to maintain course

Posted by The Aramco Group on Wed, Nov 1, 2017 @ 14:11 PM

President Trump is expected to announce his pick for the next Federal Reserve Chair today, a move that will shape monetary policy in the U.S. for years. The top contender and likely choice is current Federal Reserve governor Jerome "Jay" Powell, succeeding current Fed chair Janet Yellen.

Powell's selection is an indication that the administration is not interested in shaking up the Fed as Powell is expected to maintain the interest-rate policies that Yellen has implemented. The Fed has raised short-term interest rates four times since December 2015 with the possibility of an additional increase by the end of this year.

Yellen's strategy has been largely to maintain a steady course of incremental, yet cautious rate increases. Inflation falling short of the Fed's goal of two percent is a key factor in whether Fed officials vote to increase the benchmark interest rate.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4 percent and 15-year rates are near 3.25 percent.

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