Trump names Jay Powell to replace Janet Yellen as Fed chair

Powell served as undersecretary of the Treasury under George H.W. Bush and was appointed to the Federal Reserve Board of Governors by Barack Obama in 2012.
10:58 | 11/02/17

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Transcript for Trump names Jay Powell to replace Janet Yellen as Fed chair
Thank you everybody thank you very much. Who. We'll probably make certain hot water and Apollo. It's not immigrant terrorism quite as in Vegas. And they see presidents from leaving the podium and win his she asked to name his nominee. To be the new chairman of the Federal Reserve Jay Powell ignoring some questions from reporters there but focusing on the issue at hand for him which was this key. Appointment that is crucial to the US economy for so many reasons take and mom and about life here. With Rebecca Jarvis ABC's chief business correspondent radio and an area I'm good at that Rick Klein Dan in DC has been away and it just a second to bid jump us off here we're back at this appointment we knew was coming to some degree. Jay palace considered the safe choice the continuity candidate for a number reasons why is that thome back. Am well first off he's already on the Fed's board of directors so he's already a member of the Federal Reserve appointed in 2012. By then President Obama he's a Republican President Obama made two appointments to the fad. At that time one Republican and one Democrat Jay Powell was the Republican. He served in that George HW Bush's administration at the time was the assistant secretary and undersecretary of the treasury. And the perception of Jed Powell is that he will very much continue on the tradition of the current Federal Reserve under chair yelling which has banned one. Moderates slow paced interest rate hikes right now interest rates are between one and one point 25%. The Fed's view of the economy we just got another report from the bag yesterday is that the economy is strong and continuing to improve student and the idea would be that essentially everything that is happening right now at the Federal Reserve the chances for example one more fed interest rate hike by the end of the year. Very likely. Three more interest rate hikes by next year also likely to the mandate for this man is kill method. Yes keep fish shaped steady if Ben's mandate the fat has the Fed basically has a mandate to make sure that. Employment is maximizing in this country right now the unemployment rate in this country is near. Near record low that's four point 2% right now in the country. Big a job well the Fed is to make sure to keep unemployment. As low as it can be so can maximize employment make as many create as many jobs as possible and at the same time make sure that prices inflation. Don't get cell out of hand all of a sudden we can't afford to buy. So Rick Klein here at. I think I'm pretty economy right the unemployment rate is at a sixteen year low. Economic expansion is in this nineteen year now all things going really really well for Jay Powell they think time. President trump didn't have to tune name him he couldn't just reappoint head. Janney gallon which is actually been the common practice in modern history if the chairman is there and has only done one term in the economy's doing well they get reappointed to why do you think the president at that. You write that has been produced at the tradition recently Ben Bernanke was named by George W. Bush reappointed by Barack Obama of course before that you had Alan Greenspan. First of what about Ronald Reagan he served all the way up and threw the Obama years reappointed by Republicans and Democrats. I was struck by a bite something though in this is that president trump could have gone far outside the box and if you listen to -- seven the campaign trail the criticism he had for Janet Yellen even suggesting at one point that she was trying to change the economy's trajectory. To help Hillary Clinton. You don't hear any of that from the present anymore and it seems like they have developed a real relationship and you saw president trump. Heaping praise on Janet Yellen today if she is he has been destructive how has been described as kind of the Republican version. Of Janet Yellen so I actually think he could have gone. Far far afield from where he did and this is the safer. Choice of continuity is a got has won a lot of things up he didn't blow this up today. So we had a little bit the heads up that this would be the name that we are all going to learn today I'm seeing any kind of reaction so far to the name. Little prickly as far as Wall Street is concerned and I haven't looked at price action in the last second meanwhile street can literally. Wall Street is essentially where it was prior to the announcements prices started out a little bit lower today but that's nothing to write home about it's a pretty muted limited reaction from Wall Street I think. There's one other portion of what the Fed. Can view and this might have something to do with. Of the banks the Fed has. A few more powers given Dodd-Frank any regulations under dot freight view to set deeper regulations when it comes to banks and Jay Powell has been an advocate for fewer in simpler rules on small and regional banks. One of the big. Criticisms. Among some analysts had out coming out of Dodd-Frank is that it was a blink it's set of rules that applied to banks across the board. And smaller and regional banks would say well we can't adhere to the exact same practices that for example JPMorgan Chase or Bank of America can hear Q my work much smaller we don't of the budgets. That could be an area that he could actually flex some muscle in and have some say in as fed chair. So here's the other thing where that might become conversations on the line if he gets confirm it to cal Thomas and if he gets confirmed. Rick Klein let me ask you this is it Rebecca says this is the safe choice for a lot of reasons he is a cautious approach. Two economic growth in the same tradition as Janet Yellen. That's not the president's approach that is not what he has been pushing for and we've seen unprecedented. Two straight quarters at 3% GDP that the president says he wants to see more of fat. Could be a problem. I think it's a question is gonna come up in the confirmation hearings as it has for most anyone the president. Has a point the particularly after he told director call me FBI director. Roughly similar position of of a quasi independent eight agency. He wanted loyalty I think you're gonna hear a lot of questions about. What kind of conversations half between the president and his advisors in Jay Powell they're looking for any kind of assurances or kind of coordination and communication you get in that position is supposed to be. At least extensively removed from politics but look I think he takes over time of the economy's humming the president doesn't wanna screw that up he's got some legislative priorities that moving that direction. He wants to see growth because it's good for him politically and it's good for the country that's one area that's almost undeniable at this point. That they they did the countries are moving in the right direction when it comes the economy with employment and with the stock market it people's formally gays feel better these days he wants to see that trend continue. I am curious if he would ever kind of exert influence. On a fed chair that he fell it wasn't doing the right thing we know that he's a Clinton attacked as about anyway on Twitter I and I do expect it to be an issue that the senate that brings up during the confirmation hearing. Cents worth noting an act your New York Rebecca we're talking about this on the day that the GOP house leadership unveiled their tax plan. It's on to huge economic. Repercussions for that as well how is all of this sort of fitting together in the puzzle how are you looking to approach this as a landscape of where we might be over the next few years. Why I think first of all it's that if you have a nomination and you have a plan that's on the table that could change numbers I'm import data the president started the tax plan is concerned a lot can change. I eat them from from Wall Street's standpoint there were so much expectation. Put on this administration. Around the tax plan around infrastructure spending and around what would happen with regulations. And it when you look at this tax plan when you look at. What's happening as far as regulations are concerned. Most of these things are moving in the direction that Wall Street had anticipated now. Obviously there are so much that subject to change here. And I think that once people start to take a closer look at the tax plan. That's where and this is where Rick Klein can jump in that's where where the people are gonna have their say about whether or not they feel this is fair whether or not they feel this is just and whether or not they feel like this is what they truly voted for the Rick Klein jumping here when he sank. I'm struck so far that there isn't a constituency out there are so far for this tax plan it that its grassroots up we're seeing a lot of big business groups and not some of the biggest. Political organizations jumping in on this and and and champion this they have not yet made the case to the middle class and I think. They've been strained in trying to describe this tax cut as a middle class tax cut president today saying it's a big Christmas gift for the American people. I'm not sure that the people have demonstrated they want this particular gift yet that's going to be the challenge here to tie this back to be economy to make an affirmative case for this tax cut. I think is one of the defining moments of the trump presidency quite honestly because he made that case based on an appeal to help the little guy to help the middle class to grow the economy in ways that lifted. All boats that's hard to deal because the wealthy frankly pay the most taxes when you do a tax cut. They're gonna get the bulk of it is a big corporate tax cut in here that only now only when it trickles down as the start of to reach the so called little lies the middle class. So I think there's a lot of salesmanship that -- that happened to make this something that the American people want as much as right now the Republican representatives there. Well and already you've heard from a couple interest groups in the business world who are actually saying no we're not into this plan you've heard from the small business council you've heard from. Homebuilders in particular who with that mortgage interest deduction rate with old the rate on that lowered. You're actually seeing one of the groups that selling off today on Wall Street for example are the home builders because. Ultimately they lose if people art in the mood to know Latin spend money on home building because they're not getting that mortgage interest deduction. So break gimme a prediction here this is that he's had time to think you're paid to the fire is there any reason that we don't see Jay Powell confirmed here. Oh I don't see any reason that he's not confirmed I think I think. I think when both Democrats and Republicans look at this they realize that the president's. Rhetoric is a campaign are needed as president could have led in some some wild directions this is not a wild direction of the choice this seems to be an area where he's listening to his economic team. Other some talk about him appointing Gary Cohen I think the markets would have been fine with that probably congressman had. A few more questions about that but he seems to in the in the areas of business the stuff that Rebecca. Covers he's taken the advice of the of the Smart people around him it would seem and he's not going in in any directions that I think would doubt overly alarmed people so. I would seek I would guess unless something major comes up in confirmation hearing summing totally unexpected is to be pretty smooth sailing by the standards of Washington and when he seventeen. Smooth sailing at that that's something we can all get behind right now in these untroubled times hey Rick Klein at Downey gave the air political director and a host of the powerhouse politics by cast. Thanks so much for Canada thanks on the and back here in New York Rebecca Jarvis the host of the no limits podcast on the air I think some of your being here pretty Tampa. They sell you for watching as well everything had a pretty anytime that the latest on these stories. Or download ABC news act it all the headlines right you're on a couple device for now I'm on an Abbas Buffy back here soon.

This transcript has been automatically generated and may not be 100% accurate.

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