Here's an excerpt from today's Early Look written by Daryl Jones:
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On the monetary policy front, the biggest question at the moment is clearly who Trump will tap to be the next Chair of the Federal Reserve. The two clear front runners are old Hedgeye friend John Taylor from Stanford and Jerome Powell, a current Fed governor. While both are certainly conservative, this is a bit of a battle between the insider Powell and the rabble-rouser Taylor, who has been critical of the Fed and earlier this year said: “One clear lesson from this historical experience is that the Fed should normalize policy and get back to the kind of policy that worked well in the past.” It seems likely that Taylor, based both on his public comments and his eponymous Taylor rule, believes that interest rates should go higher. Ultimately, it is this view, which of course is bad for real estate development that may push him into the Vice Chair’s seat. Nonetheless, we’d be happy to see him there at a minimum. Rationality at a central bank is never a bad thing. |
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