Powell, a Fed governor since 2012 and now said to be chosen by Trump, is mostly seen as keeping the central bank on its current trajectory: a few interest-rate increases next year and a couple more sometime after that, with the benchmark rate peaking at about 2.8 percent. Sumner also expects Powell to continue Yellen's policies in the short run.
If confirmed by the Republican-controlled Senate, Powell will start his term in February 2018, serving the fixed term of at least four years.
Though Powell would be the first Fed leader in nearly four decades to lack an advanced degree in economics, associates say he's devoted much time since joining the board to schooling himself in monetary policy from the Fed's stable of economists.
"Relative to a John Taylor or Kevin Warsh, Powell is more of a continuity candidate", Mahajan says, suggesting that low borrowing rates could support economic growth and a strong stock market.
"The Fed Chairman needs to lead the committee, not listen to the committee and decide what to do based on the consensus of views around the table", said Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. The policy led to steady job growth and a downward march of the unemployment rate to its current level of 4.2 percent. In a statement after its latest policy meeting, the Fed left its key rate in a low range of 1 percent to 1.25 percent. In fact, he was born and raised in the District and its Maryland suburbs and has served in both the Treasury and the Fed.
Duffy agreed, saying people do what they do best, which includes investing and running their businesses, when red tape is streamlined, taxes are reduced, and the Fed gets out of the way. He might not be as inclined to keep interest rates low, but he's unlikely to take a drastically different approach.
The bad is that it shows that in today's fiercely partisan political environment, even this non-partisan job has become politicized. While he's expected to stay the course set by Yellen when it comes to making monetary policy, investors should look for signs of how the new chair could react in a change of economic conditions, according to Steven Friedman, senior economist at BNP Paribas Asset Management. But Powell is kind of a throwback: Before Alan Greenspan came along, it was more common for Fed chairs not to be economists. "The multiple for the S&P 500 has risen about 8% since the election, but earnings are growing again, and the earnings benefit of reform likely outpaces the multiple expansion we've witnessed".
It also brings a confidence and authority that make it unlikely that he will bend to the will of politicians, even if his appointment appears inherently political. "Any adjustments to the regulatory framework should be modest". Earlier this year at Reagan National Airport, Matthew McCormick, a government economist who was traveling with him, said he watched Powell carry a car seat and luggage for a family he saw was struggling to make a connecting flight at Reagan National Airport.
Powell made a fortune as an investor before joining the world's biggest central bank as a governor.
From 1997 to 2005, he was a partner at private equity firm Carlyle Group. So he picked somebody who's a little bit like Yellen, but is a Republican.
Those characteristics stood Yellen in good stead at the Fed at a time when many of the assumptions of central bank policymaking - on inflation, productivity, investment and wages - had come into question.
At his nomination event, Powell assessed that the U.S. economy made progress toward full recovery, with the economy close to full employment and inflation moving up toward 2 percent target.