New Fed Chairman Faces Tough Discipline Tests During 2018
As expected, President Trump nominated Fed Governor Powell to replace Chair Yellen when her term expires in February, an appointment widely viewed as ensuring the continuity of data dependent US monetary policy.
Despite recently faster US economic growth, it is unlikely that the newly-incoming Fed Chairman will suddenly embrace a more upbeat assessment of long-term potential GDP growth.
The current US economic expansion is already at an advanced stage, thereby implying higher risks of a policy mistake due to conflicting signals emanating from economic data.
Easier US fiscal policy and potential conflicts on the Federal Open Market Committee (FOMC) could force the new Fed Chairman to impose his authority on policy implementation sooner-rather-than-later.
The incoming Fed Chairman will have to achieve additional trade-offs, both domestically and internationally, in order to attain the beautiful normalisation of US monetary policy currently discounted by financial markets.
DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the intention of delivering independent global macro investment insights and new thematic long-term ideas to investors, along with an agnostic opinion of the markets.
Said DeSaque has over 29 years of experience working as a professional economist in financial services, primarily based in London. His working role has involved extensive travel around the world, bringing him into contact with investors of different cultural backgrounds and investment requirements. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist and Investment Strategist at US banks Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he became Head of the London Economics Department in 1996. This role allowed him to engage with senior investment professionals, alongside regulators and provided a unique perspective of market intelligence at work.
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