Trump could exert influence on the Federal Reserve – Expansion MX

NEW YORK (CNNMoney) –

The president-elect of the united States, Donald Trump, has manifested in a very open way, his aversion against the director of the Federal Reserve, Janet Yellen, on several occasions.

Just in September, Trump said Yellen should “be ashamed of herself”.

Now, the mogul will finally have the opportunity to find a replacement not only to her but to at least three of his colleagues at the Fed, the most powerful financial institution in the world.

This is because the mandate of Yellen expires in February 2018. His close ally, vice-chairman of the Fed Stanley Fischer, will also terminate their period in the first half of that year. In fact, before you can even get to them, Trump will have the opportunity to nominate two other members to fill vacancies, which have remained so due to an impasse in Congress.

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That is a number of unusual nominees for president. In most cases, the first leaders, americans can nominate only two leaders of the Fed by the way in which they interspersed their mandates.

it is Not expected that Yellen leaves office prior to that date, although he had to fend off criticism of Trump in the sense that the Fed has a political burden.

“we do Not discuss politics in our meetings, and we do not take into account the policies for our decisions,” said Yellen in September.

All four future nominees of Trump will have votes permanent in the commission to governor, 12 members of the Reserves.

“The next president will have a rare degree of influence on the future composition of the commission of the Fed,” said economist Zach Pandl, of the firm Goldman Sachs, in a note published Monday.

The commission is considered as one of the financial institutions with the greatest influence in the world because it takes decisions about the interest rates americans. They affect the global markets, the mortgage rates americans, from credit cards and savings accounts.

Read: Janet Yellen can change them attacks Trump: the fed is apolitical

even Though the Fed is independent, its main positions require presidential nomination, which will give Trump a huge influence on the direction of the policies of the central bank and monetary policies, which will have an impact on the american economy.

In fact, Trump could have an impact on the decisions of the Fed in December on rates of interest, even before taking office. But in fact it may not give orders to Yellen.

If the markets remain turbid during the following weeks due to the uncertainty surrounding the economic policies of Trump, the cautious Fed could withdraw from its plans to increase interest rates in December.

“With this level of uncertainty, and this Fed docile, I think that it would be little characteristic that the Fed will increase rates in December,” said David Lafferty, chief of strategies market analysis firm Natixis Global Asset Management.

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By now, most of Wall Street, a 71%, which would still bet in favor of an increase in interest rates in December.

“We are still waiting for the Fed to increase interest rates in December,” said Drew Matus, an economist with the firm UBS. But he noted that the possibilities of an increase in interest rates “are smaller while the uncertainty continues to go up”.