MNI EXCLUSIVE: Fed's Williams Calls Powell Mission-Focused

--Trump's Fed Chair Pick An Open-Minded Consensus Builder, Williams Tells MNI

By Jean Yung

     SAN FRANCISCO (MNI) - Jerome Powell, President Donald Trump's pick to lead

the Federal Reserve, is an action-oriented consensus builder in the mold of his

predecessors Ben Bernanke and Janet Yellen, according to San Francisco Fed

President John Williams, who has gotten to know him well over five years of

service together on the Federal Open Market Committee. 

     The fact that the former lawyer and banker lacks an advanced economics

degree -- and would be the first Fed chief without one in 30 years if his

nomination is approved by the Senate -- doesn't bother Williams, himself an

economics heavyweight. He said Powell is intellectually driven, non-ideological

and has taken graduate-level education in economics as a policymaker.  

     "He is very open-minded. He's one of these people who asks lots of really

good questions and wants to understand very much the differing viewpoints,"

Williams told MNI in an exclusive interview Friday. 

     "I think he has a nice combination of both strong consensus-building skills

and also will make sure that we're moving ahead in the right direction." 

     The two men have toured a number of Asian economies together, part of

annual weeklong trips traditionally undertaken by a Fed governor and the

president of the San Francisco Fed. Williams said he has come to expect Powell

to be versed on bleeding edge research and armed with thoughtful questions. 

     "Invariably when I'm with Jay and traveling in a plane or a bus or sitting

at the airport, he'll start asking questions. 'So, John, what do you think about

this new paper that just came out?'" Williams said. 

     "He's very intellectually curious about lots of issues, issues like how

does globalization and automation and technological change affect employment and

wages around the world. These are the kind of issues economists like to think

about." 

     That characteristic will serve him well as Fed chair, Williams said. An

effective leader of the 19 FOMC policymakers -- when fully staffed -- has to

make sure the diverse set of viewpoints are not only heard but distilled into a

key policy action that is the best possible decision for the time, Williams

said. 

     "Watching Chairman Bernanke and then Chair Yellen and how they did that has

provided very good role models," he said. "I view Jay Powell as very much the

same kind of person, in the sense that he wants to hear all the viewpoints and

he wants that exchange."

     "In my experience watching and working with him, he'll always want to come

to the right decision and move forward on that," Williams said.  

     Asked if one concern some analysts have expressed -- that Powell has yet to

prove himself in a crisis -- is a valid one, Williams cautioned that the past

six years have not been easy times. 

     Difficulties in the euro zone, the very slow economic recovery in the

United States, the Fed's deployment of QE3 and forward guidance and the

unwinding of the balance sheet this year have been thorny challenges, Williams

said.  

     "He's been there throughout that period," Williams said. "So he does have

that experience of being in the trenches if you will." 

     And on that note, Williams called out current Fed Chair Janet Yellen as "a

fantastic leader through a very difficult time."  

     "I think it's been a little bit underappreciated the challenges the Fed has

faced in monetary policy the last several years," he said. 

     "The fact that we've started the normalization process for the balance

sheet and that's gone so smoothly, with the economy growing so strongly and

things going as well as they have is a testament to her leadership." 

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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