US: Fed Governor Powell’s speech in focus - BBH

Federal Reserve Governor Powell speaks before the Senate Banking Committee shortly after the US equity market opens and will be keenly watched by investors, according to the analysts at BBH.  

Key Quotes

“Powell is the only Republican-appointed Governor.  One cannot tell that by his voting pattern.  This is important to keep in mind as in the coming weeks, nominations for the vacant three Governor seats are expected.  We are struck by the technocratic and collegiate culture.  Think about more than three- decade tradition of the Chair being named by the president from one party and re-nominated by the president of the other party (Volcker, Greenspan, Bernanke).”

“This is not to argue for rigid institutional inertia.  Rather, it suggests the difficulty, for example, in trying to set monetary policy driven by a set of decision-making rules, like the Taylor Rule.  It also suggests that being in favor or high or low interest rates is a misleading abstraction.  The views must be understood within the context of economic and financial conditions.  Hawks and doves are contextual and relative categories.”