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UBS Chief Economist: Federal Reserve's Stance May Lean Towards Hawkish, Concerns About Its Independence
Summary: According to sources, UBS Chief Economist Paul Donovan wrote that a criminal investigation against the current Federal Reserve Chairman may ultimately help strengthen the central bank's independence. Market reactions indicate growing concerns among investors about the Fed's ability to manage interest rates without political interference. Despite overall minor fluctuations in asset prices, long-term US bond ...
According to sources, UBS Chief Economist Paul Donovan wrote that a criminal investigation against the current Federal Reserve Chairman may ultimately help strengthen the central bank's independence. Market reactions indicate growing concerns among investors about the Fed's ability to manage interest rates without political interference. Despite overall minor fluctuations in asset prices, long-term US bond yields are rising and the US dollar is weakening. Donovan suggests that Powell's tough stance may indicate his reluctance to resign from the Fed board this year; meanwhile, there are signs that the US Senate may delay confirming the nomination of a new Fed chairman. He also points out that market concerns about central bank independence may translate into a hawkish force in future monetary policy decisions.
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Link: UBS Chief Economist: Federal Reserve's Stance May Lean Towards Hawkish, Concerns About Its Independence [Copy]
