Economy

Jerome Powell speaks on bank rate, but nothing about Fed chair nomination

Key Points
  • Fed Governor Jay Powell spoke at a roundtable discussion just hours before he is likely to be nominated to lead the central bank.
  • Powell's speech focused on the Libor rate but did not get into monetary policy.
Trump expected to make formal announcement on Fed chair pick
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Trump expected to make formal announcement on Fed chair pick

Fed Governor Jerome Powell delivered a speech Thursday morning but dropped no hints about his impending appointment to lead the central bank.

Powell spoke at a roundtable in New York just hours before he likely will be nominated by President Donald Trump to lead the central bank.

The remarks were videotaped and in fact got cut off apparently due to a technical problem. However, it led to a joke regarding the worst-kept secret in the room that Powell is likely to be tapped to lead the Fed.

The problem with the recording led to a joke about Powell's appointment.

"One theory what happened was the video got corrupted and that's why it got cut off," said, Christopher Giancarlo, chairman of Commodities Futures Trading Commission. "Another theory is he was videotaping it and someone said, 'Uh, governor, the White House is on the telephone."

Current Chair Janet Yellen's term expires in February. While Trump has spoken positively about her in recent days, he was sharply critical of her during the 2016 presidential campaign. Also, the president is likely to want to put his own stamp on the Fed, of which he also has slammed repeatedly.

Trump is scheduled to make the announcement at 3 pm in the Rose Garden.

In his speech, Powell discussed Libor, or the rate that banks charge each other for short-term loans. The rate, formally known as the London Interbank Offered Rate, has been the subject of controversy over reports that it has been manipulated often through the years.

However, only one person ever has been convicted of charges relating to Libor manipulation.

Wall Street is transitioning away from the rate, a process that Powell said will be costly but important for the financial system's integrity.

"So, while much work has been done, there is more still to do. I have been heartened in seeing that many market participants are already confronting these issues," Powell said in his prepared remarks.

He apologized for not attending the meeting.