Fed's Powell: Chair Yellen has 'most of leverage'

Economy | Politics | Markets 11/30/2016, 6:56 PM
Fed's Powell: Chair Yellen has 'most of leverage'

The diversity of opinion and transparency within the Federal Open Market Committee is a strength of the United States Federal Reserve System, governor Jerome Powell said, but stressed he believes the public has been looking too much into remarks by the monetary panel's members for clues about the next interest rate increase.

Speaking at an event in the Brookings Institution in Washington on Wednesday, the policymaker underscored Fed chairwoman Janet Yellen "has most of the leverage" in charting trajectories. Observers and market participants should "listen carefully to what she says," according to Powell.

He noted the messages of his peers bode well with the audiences in terms of support to the central bank as a public institution. "With the proliferation of media of all kinds, there is a need for content, and we have been willing suppliers. In my view, these public appearances are mostly not about gaining leverage in a negotiation," he stated. Fed's dot plot tool has been revealing how opinion of policymakers evolved but it is otherwise not useful for predicting short-term moves in interest rates, the governor said.

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