More and more traders tend to believe that changes in the Fed’s management will not lead to changes in the monetary policy established earlier. Talks about the possible replacement of the Fed’s Chair began after Yellen’s speech at the economic symposium in Jackson Hole. Since she avoided specific statements or signals in the speech, experts questioned her future on this post.
As the main candidate for this high position, market participants see Gary Cohn, the White House economic adviser. However, even the lack of intrigue on this important issue does not give any assurance that a change in the leadership will lead to a revision of the Fed’s policy. Whether Trump nominates Cohn or reappoints Yellen, investors handling more than $1 trillion in fixed-income assets hardly foresee change in the Fed’s course. They are investing money with at least neutral trading sentiment - if not outright bullish - on the $14.1 trillion Treasuries market. “I see a Cohn Fed and a Yellen Fed not being terribly different,” said Steve Bartolini, portfolio manager of inflation-focused strategies at T. Rowe Price Group, which oversees $204 billion of fixed-income assets. Janet Yellen’s monetary policy does not coincide with Trump’s point of view, who, while still a presidential candidate, threatened to dismiss her immediately after the election. Now, apparently, the Fed’s Chair will leave her post and without Trump’s help.
In his column on MarketWatch, Greg Robb compared Yellen’s speech at the symposium to "a swan song." The Fed’s Chair stated that she firmly adheres to the monetary policy that was developed under the Obama administration in the aftermath of the financial crisis.
