Jerome Powell’s chances of another Fed term diminish amid stock market controversy, betting markets show


Fed Chairman Jerome Powell is due to speak on Thursday. Pool / Getty Images

Jerome Powell’s chances of being confirmed by the Senate as Fed chairman for another term in 2022 are diminishing, according to data from the betting markets website PredictIt.

Powell’s odds fell from around 80% in August to 61% on Monday morning. The sharp drop comes amid an ongoing stock market controversy that has trapped several Fed governors and led to the resignation of Boston Fed Chairman Eric Rosengren and Dallas Fed Chairman Robert Kaplan .

Annual financial disclosure forms have revealed that several Fed governors, including Powell, held assets that the Federal Reserve was also buying as part of its COVID-19 stimulus program, including municipal bonds and treasury bills.

Bloomberg reported on Friday that Fed Governor Richard Clarida had sold between $ 1 million and $ 5 million in bonds and used the proceeds to buy shares just a day before Powell issued a statement indicating a potential change in Fed policy at the start of the COVID-19 pandemic last February. .

The pressure on Powell increased last week, with Senator Elizabeth Warren calling the Fed chairman a “dangerous man” when it comes to his bank policy.

“Your track record worries me a lot. You acted to make our banking system less secure, and that makes you a dangerous man to run the Fed,” Warren told Powell, adding that she would oppose his re-appointment.

Another Fed governor, Lael Brainard, is a favorite among progressives to succeed Powell. Her chances of becoming the next Fed chairman jumped on PredictIt to 24% from a number last month.

Either way, uncertainty will certainly remain as investors seek to determine who will be the next chairman, Fundstrat’s Tom Lee said in a note Monday. “Markets don’t like uncertainty so it will weigh on the markets over the next few months,” Lee said.

Powell’s term as Fed chairman ends in February 2022, while his term as Fed governor ends in January 2028.

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