Stock rally subsides despite relief over Powell’s second term at the Fed

For investors, who have become accustomed to Powell’s Fed leadership after some initial growing pains, this means they know what to expect from the central bank in the coming years.

“This decision removes the uncertainty,” ING chief economist James Knightley said in a note.

Biden will nominate Fed Governor Lael Brainard as vice chairman. Brainard was also an option to take over Powell. Had she been elected chairman, the market’s response might have been a little more erratic, not least because her confirmation would likely have been more challenging compared to Powell’s.

Still, the Powell confirmation in its current form may face its own problems. For example, Senator Elizabeth Warren previously called Powell a “dangerous man to lead the Fed.”

“Chairman Powell and Governor Brainard have similar views on monetary policy,” Goldman Sachs analysts said, noting that the current high levels of inflation are likely temporary in the grand scheme of things, even if they don’t seem short-lived. currently.

Powell and Brainard also emphasized that they are considering a broad set of indicators to measure the progress of the Fed’s broad and inclusive employment target,” Goldman analysts said.

It’s been a short week on Wall Street, where the stock is closed on Thursday for Thanksgiving and only open for half a session on Friday.

— Kaitlan Collins and Betsy Klein of CNN contributed to this report.