Published: Wed, February 07, 2018
Markets | By Rosalie Gross

Federal Reserve chairman vows to 'remain vigilant'

Federal Reserve chairman vows to 'remain vigilant'

Jerome Powell has taken office as the sixteenth president of the US Federal Reserve on Monday and takes over from Janet Yellen.

In his remarks, Powell praised Yellen as the most qualified person to hold the job of Fed chair in the central bank's history.

The new Fed chairman, moderate Republican, believes that rules that follow monetary policy are practical in defining strategy, but y represent a very small part of analysis he needs to make to mark course.

Outgoing Federal Reserve chair Janet Yellen said USA stocks and commercial real estate prices are elevated but stopped short of saying those markets are in a bubble.

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Powell also said that the "financial system is now far stronger and more resilient than it was before the financial crisis".

Powell has a bachelor degree in politics from Princeton University and a law degree from Georgetown University. "I'm not able to think of a human activity that can be simplified in an equation", he commented in one of his speeches before he was appointed as central bank's leader.

"Today, unemployment is low, the economy is growing, and inflation is low". He did not mentioned the stock market turbulence of the past week, which culminated in record falls on the day he was sworn in. The Federal Open Market Committee, the bank's policymaking arm, took its key overnight interest rate target to near-zero in late-2008 and left it there for seven years. Economists widely expect the Fed to hike interest rates three times this year, with the first coming in March.

"If the Fed raises (the) rate sufficiently to assure financial stability, there is the risk that the economy will slow too much". The oath was administered by Vice Chairman Randal Quarles. "Yes, it can keep going", she said.

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