Outgoing US Federal Reserve chair Jerome Powell on Wednesday (local time) shared some advice for his to-be appointed successor after announcing the central bank's decision to keep rates unchanged.
Market experts had expected that the Fed would keep interest rates steady after its two-day policy meeting on Wednesday, despite media reports indicating pressure from the Donald Trump administration to lower rates.
In his speech, Powell, whose term ends on 15 May this year, laid out three specific pieces of advice for the next chair of the US Federal Reserve.
What was Powell's advice to his successor?
"One is, stay out of elected politics. Don't get pulled into elected politics. Don't do it," Powell said.
"Another is that our window into democratic accountability is Congress, and it's not a passive burden for us to go to Congress and talk to people. It's an affirmative, regular obligation. If you want democratic legitimacy, you earn it by your interactions with our elected overseers," the Fed chair added.
"And the last thing is it's easy to criticize government institutions in so many ways. I will tell whoever it is [that] you're about to meet the most qualified group of people you not only have ever worked with [but] you will ever work with, and when you meet Fed staff. And not everybody's perfect, but there isn't a better cadre of professionals more dedicated to the public well-being than work at the Fed," he further advised.
Who will be the next Fed chair?
US President Donald Trump has yet to confirm the name of the next chair of the Federal Reserve, and speculation is rife about Powell's successor, with a few names doing the rounds.
The four frontrunners for Powell's job are Trump's economic adviser Kevin Hassett, Fed governor Christopher Waller, former Fed governor Kevin Warsh, and BlackRock's chief investment officer of global fixed income Rick Rieder.
With the five-month process of finding the next Fed chair down to its final days, BlackRock's Rick Rieder is being seen by prediction markets as the frontrunner to replace Powell, reported CNBC.
That said, market sentiment with regard to the Fed chair position has been volatile, with Kevin Warsh having held an advantage less than a week ago.
Sentiment may have shifted towards Rieder in recent days after Trump, at the recently-concluded World Economic Forum (WEF) in Davos hinted that he may have zeroed in on the candidate of his choice.
"I’d say we’re down to three, but we’re down to two. And I probably can tell you, we’re down to maybe one, in my mind," Trump told CNBC at Davos.
While the US President remained coy on who could succeed Powell, he said that Rieder, the last to be interviewed, was "impressive".
When is the Fed chair announcement likely?
Despite Trump's comments at Davos, the US President thus far has refrained from committing to a timeline for announcing Powell's successor.
However, Treasury Secretary Scott Bessent, who had earlier also been considered for the post, hinted recently that Trump's decision was likely to be announced soon.
On Wednesday, Bessent told Yahoo Finance's Jennifer Schonberger that his "inclination is we may hear something in the next week or so."
