You may remember that in early September I wrote about the Federal Open Market Committee (FOMC) – basically, the Fed officials who vote on monetary and interest rate policies, which govern a massive part of our economy. They try to guide our economy through the booms and busts of business cycles (how well you think they do that probably depends on how your portfolio looks).
These all-but-unknown folks have their hands on the levers of the economy, so I took a look at the FOMC voting member backgrounds and asked: what qualifies these people to decide if savers get punished with lower interest rate payments or borrowers get access to loans with reasonable repayment terms? What qualifies these Fed officials to tinker with the value of the U.S. dollar by experimenting with unproven academic theory?
After eight years of tinkering and experimenting with tools that created asset bubble after asset bubble, these policies haven’t magically created jobs or corporate revenues. They have made it far too easy for companies to buy back their own stock, which in turn makes it look like those companies are more profitable – and all while fueling a stock market bubble for good measure.
So with a new U.S. President-elect, what will the Fed look like in the near future? Will Trump try to fire Fed Chair Yellen? Will the new appointees really make any difference at the Fed? Let’s take a look at who’s on deck…
The voting members are split into two groups: the Board of Governors (BOG) who are political appointees, and regional Federal Reserve Bank presidents. In my last article, I highlighted the backgrounds of the 2016 voting members. Since the BOGs are appointed to 14-year terms, nothing is due to change until 2018.
Sure, the new president-elect could ask for Janet Yellen’s resignation but her term as Fed Chair is up in early 2018 anyway. He might want to focus on getting his picks on the BOG first since there are two vacant spots that need to be filled and confirmed by Congress. My guess is that she serves out her term as Chair and resigns from the BOG in 2018 (her term on the BOG is up in 2024).
