(Kitco News) – Gold is seeing little reaction to the official news that President Donald Trump has nominated Jerome Powell to be the new Federal Reserve Chair.
“Based on his record, I am confident that Jay has the wisdom and leadership to guide our economy through any challenges,” said Trump in the Rose Garden at the White House.
Following Trump’s comments Powell noted that the U.S. economy is close to a full recovery and close to full employment. He added that the financial system is stronger than it was before the financial crisis.
“I will continue to work with my coleauges to make sure the Federal Reserve is vigilant to market changes and risks,” said Powell.
Current Chair Janet Yellen said that she is committed to working with Powell to insure a smooth transition.
Analysts are not surprised that markets are seeing little reaction as the nomination was widely expected.
December Gold prices last traded at $1,278 an ounce, relatively unchanged on the day.
The nomination ends weeks of speculation, with markets expecting Powell to be nominated as he is seen as the most likely candidate to continue the policies enacted under Yellen’s tenure.
However, some economists have raised concerns that Powell, as a lawyer, doesn’t have the experience needed to lead the U.S. central bank.
“The Fed will face many difficult challenges over the next few years and it is unclear whether Powell has the skills to navigate them,” said Paul Ashworth, chief U.S. economist at Capital Economics. “The risk of a serious policy mistake – in either direction – will arguably be higher under Powell’s leadership than under Yellen’s. And policy communications may become more muddled, if Powell doesn’t provide strong intellectual leadership and the policy debate descends into a free-for-all among regional Fed Presidents.”