As the new head of Federal Reserve industry veteran, Jeremy Powell sides supports the position of Janet Yellen that quantitative easing has brought millions of jobs to the US labour market without adversely affecting financial markets.
Nevertheless, in the past, Powell was more sceptical about the regulator’s expansive policy. In the first months of his work with the Central Bank, Powell was among those who seek more openness from Ben Bernanke on the timing of the completion of bond buying. Now Powell will “get into management” a fairly strong economy, low inflation and short-term policy from Janet Yellen.
The head of Federal Reserve Bank of Minneapolis Narayan Kocherlakota expressed doubts that Powell has a clear response plan for the next recession shock. During his tenure in office, Powell changed his position from a hawk to a dove. It is difficult to call a new leader friendly for the markets since Powell is a lawyer by profession and compared to the last case of “non-economist” William Miller, he can also avoid contradictions with his colleagues in how to control the expansion of the economy.
The Japanese economy continues steady but moderate growth reported by Japanese government in the report, supporting the forecast for the sixth consecutive month. The economy is growing for seventh consecutive quarter showing the longest growth in 16 years, but the growth rate of consumption slowed in the third quarter of this year.
Oil prices fell on Tuesday amid uncertainty associated with the OPEC meeting this week, where they will decide whether the quota for production will be prolonged. Members of the organization, including Russia, meet on Tuesday to decide whether to extend the production cap until the end of 2018 and bring the market into full equilibrium. Analysts at Goldman Sachs see the potential for lower prices, as the news about output cuts was priced in long before the meeting and now the market will adjust positions probably from on the negative side.
Traders brought the price of American grade WTI to 59 levels last week, the highest level since mid-2016 amid news about interruptions of supplies through the main pipeline of Canada to the US Keystone. However, TransCanada Corp said this week that it will restore supplies via pipeline after receiving the approval of relevant US supervisory authorities. WTI fell by $ 1.5 to 57.50, while Brent also traded in negative territory.