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A Yellen replacement is unlikely to throw Fed off course, says Bullard

  • Trump administration seems happy with the Federal Reserve's current policy, says Fed's James Bullard.
  • Policy unlikely to be thrown off course even if chair Janet Yellen is replaced.

When President Donald Trump officially embarked upon his presidential career in January, deafening whispers began to circulate around Washington that it soon could spell the end of another highly prized title: that of Federal Reserve chair.

Yet, six months on, Janet Yellen remains at the helm of the U.S. central bank and, according to one of its members, the chances of a drastic overhaul are becoming less and less likely.

The Trump administration is signalling that, as far as policy goes, and as far as interest rates go, they're not too unhappy with the current policy," St. Louis Federal Reserve chief James Bullard told CNBC Friday.

"This suggests that even if they reappoint her or appoint somebody else, you'd get some continuity in the process and you wouldn't have an abrupt change," he opined.

Federal Reserve Board Chairwoman Janet Yellen speaks during a news conference after the Fed releases its monetary policy decisions in Washington, June 14, 2017.
Joshua Roberts | Reuters
Federal Reserve Board Chairwoman Janet Yellen speaks during a news conference after the Fed releases its monetary policy decisions in Washington, June 14, 2017.

This would be good news for markets, he said, which have been struggling to assess the likelihood of a sudden shift in the U.S.'s increasingly hawkish path.

"That's very important," noted Bullard. "A lot of the market pricing is around who's going to be in charge six, nine, twelve months from now."

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