President Donald Trump announced plans today to nominate Jerome Powell for chairman of the Federal Reserve, replacing sitting chair Janet Yellen.
Powell is a sitting member of the Board of Governors of the Federal Reserve and a voting member of the Federal Open Market Committee, which is the policy-making arm of the central bank that makes decisions about monetary policy. Before coming to the Fed, Powell served as assistant secretary and undersecretary of the Treasury under former President George H.W. Bush.
It was unclear if current Fed chair Janet Yellen, whose term expires in February 2018, would be asked to serve another term. President Trump had criticized her performance on the campaign trail, saying that the Fed's keeping interest rates near zero helped the Obama administration.
Rep. Sean Duffy (R., Wis.) asked Yellen in July if she was seeking to serve another term. Yellen replied that she intended to serve out her term.
Duffy, who has introduced a new podcast called Plaidcast, talked about Powell's nomination and current Fed policy with Rep. Bill Huizenga (R., Mich.), who chairs the House Financial Services Capital Markets Subcommittee.
On the podcast, Duffy asked Huizenga if Janet Yellen should leave her post as chair of the Federal Reserve.
"I think that there are better options," Huizenga said.
In regards to reforming the Fed, the congressman said that to improve the health of the economy, market forces should drive interest rates and monetary policy.
"We don't have true market forces, and whether you agree or disagree about the Fed's interference into interest rates through monetary policy, through the quantitative easing program, which was literally when the U.S. government was offering to sell bonds, nobody was buying them," Huizenga said. "So the Fed bought them from Treasury, and they pretended like that was a free market exchange. Well, it really wasn't, and Japan has now done that, Europe has now done this, we've artificially driven down interest rates."
"Again, you can argue both ways as to whether it was a good thing, bad thing," Huizenga said. "What most people are saying is, hey, we've been at this now for eight years, nine years, it's time that we allow market forces back into it."
Both Duffy and Huizenga also touted predictability and how it helps Americans make decisions about their finances and investments and how it helps businesses make operating decisions.
"Predictability is a big thing that I hear a lot," said the Michigan congressman. "You had the federal government changing the rules all the time and it was mostly because of the political pressure and so you had business owners, large, medium, and small business owners all kind of sitting on the sidelines saying, ‘You know what? We're not sure what's going to happen with our health care, we're not sure what's going to happen with the regulatory environment, we're not sure what's going to happen with our taxes.'"
Huizenga said that a lot of these people decided to sit on the sidelines due to uncertainty because they were afraid they may get burned like they did in 2009 and 2010.
"We have successfully, I believe, rolled back a number of those regulations," Huizenga said. "We've got to deal with tax reform to lend some predictability and lower that overall corporate tax rate and maybe more importantly that pass-through rate for small businesses."
Duffy agreed, saying people do what they do best, which includes investing and running their businesses, when red tape is streamlined, taxes are reduced, and the Fed gets out of the way.