Trump to Confirm Next Fed Chair; Market Awaits Further Details on Tax Reform
Published November 2, 2017
As expected, the Federal Reserve left US interest rates unchanged while setting the stage for its next rate hike in December; the Fed mentioned strong US economic growth and an improving labor market as catalysts for further monetary tightening.
The US dollar remained strong throughout the day, however, did not make any substantial gains as investors largely priced in this telegraphed result from the Fed.
According to sources familiar with the matter, US President Donald Trump is likely to nominate Jerome Powell as Federal Reserve Chairman later today; Powell is currently a Federal Reserve Governor and is set to speak at an event unrelated to his potential nomination later this morning.
Janet Yellen’s term as Federal Reserve Chair will expire in February 2018; investors will look to see if Trump’s eventual pick for the new Fed Chair will carry on Yellen’s recent hawkish tone.
Republican congress members are expected to release a proposal for their tax bill later today after a one-day postponement; US lawmakers are seeking to offer $6 trillion in tax cuts over 10 years.
The US dollar has experienced strong gains from the early success of this bill as Trump looks to score a major win in overhauling US tax codes for the first time in 31 years; these gains for the greenback stemmed largely from the proposal to cut the corporate tax rate from 35% to 20%.
Stephen Poloz cited NAFTA renegotiation as a major hindrance for Canadian corporate investment in the near future; an economic data release showed that the pace of growth of Canadian manufacturing slowed to a nine-month low.