President Trump announce on Thursday that Jerome Powell will replace Janet Yellen as the chair of the Board of Governors of the Federal Reserve System. Often argued as the second most powerful position in the U.S. government after the president, politics has overshadowed economic expertise in the new appointment.
Yellen is a world-renowned former chaired professor of macroeconomics at Berkeley, former chair of the Council of Economic Advisers, former president of the Federal Reserve Bank of San Francisco, former vice chair of the Federal Reserve Board (FRB), and current chair of the Federal Reserve Board. Her qualifications for Fed chair were outstanding. She managed the Fed with expertise, built consensus for Federal Open Market Committee (FOMC) decisions, and led the implementation of a U.S. monetary policy that fostered continued economic expansion from 2014-2017 while keeping inflation low and stable. As an academic, in my view she earned an A+ in her job.
For all this, she was not renewed for the job (despite willingness to do another term) so that President Trump, in his words, could "make his own mark."
Jerome Powell is trained as a lawyer. His undergraduate work was in politics. Although he brings to the job valuable experience in private sector finance with stints at Dillon, Read and Company, Bankers Trust, and The Carlyle Group, and served in the U.S. Treasury for Domestic Finance, he is still not nearly as qualified for the position as his predecessor, Yellen.