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Powell's renomination is 'historic', stars aligned for market disruption - DiMartino Booth

Kitco News

Biden's reappointment of Jerome Powell as Fed Chair on Monday signals a transition away from more "radical" monetary movements, said Danielle DiMartino Booth, CEO of Quill Intelligence.

In particular, the decision to reappointment Powell as Fed Chair and nominate Fed board member Lael Brainard as vice chair signals a move towards more centrist monetary and fiscal policies, Booth said.

“I think this is a message loud and clear to the progressives, to the Squad, to those that really want to push socialism as an agenda to revolutionize the U.S. economy, to take the U.S. economy away from that envisioned by our Founding Fathers,” Booth told David Lin, anchor for Kitco News. “I think Biden’s move has said, ‘I’m going to step away from these racier, more radical ideas and I’m going to come back to where the constituency of the country is telling me that it needs to be’ and to stick with democracy and to stick with capitalism.”

Importantly, Brainard, who is a staunch supporter of tighter regulations on the banking sector, was not picked for vice chair of Supervision & Regulation, a move that was seen as a victory for banking lobbyists.

Stock markets initially reacted positively, rallying on Monday morning before retreating later in the afternoon.

Biden’s move towards more moderate policies may also signal an abandonment of other more progressive agendas.

“That means that [Biden] has to give up the agenda that he might have had in mind of having a central bank digital currency, of having a conduit, a means by which to deliver universal basic income to all Americans by establishing a checking account at the Federal Reserve for every working American,” she said.

Fundamentally, Powell’s renomination as Fed Chair hasn’t steered monetary policy in another direction.

For more information on where the stock market is headed, watch the video above.

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