Tags: El-Erian | Fed | nominee | Fischer

Pimco's El-Erian Lauds Obama's 3 Fed Nominations

Tuesday, 14 Jan 2014 07:33 AM

By Dan Weil

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Pimco CEO Mohamed El-Erian highly approves of the three people President Barack Obama has decided to nominate to the Federal Reserve Board of Governors.

The nominations include former Bank of Israel head Stanley Fischer, slated to be Fed vice chairman; Jerome Powell, a current board member who is being re-nominated; and Lael Brainard, former Treasury under secretary for international affairs.

While the appointments received less attention than the weak December jobs report Friday, "the [nomination] news is more consequential for the economy and markets," El-Erian writes in a commentary for CNBC. "It is also good news."

Editor’s Note:
38 Trades That Could Turn $1,000 Into $49,000

El-Erian is most enthusiastic about Fischer. His "admirable qualities go beyond his enormous and highly admired talent, experience, and personal integrity," El-Erian said. "He is also a world class economist who uses his brilliance to engage rather than intimidate others."

With Janet Yellen as Fed chairman and Fischer as vice chair, "the country would have a dream team at the head of the Fed."

Powell offers the Fed continuity and "valuable experience gained at the Treasury under President George W. Bush and in the private sector," El-Erian notes.

Brainard, who earned an economics Ph.D. at Harvard, "brings to the Fed strong international policy and academic expertise," he argues.

The Fed now plays an outsized role in the economy, so it's "encouraging" that the three nominees would give the central bank "the right mix," El-Erian states.

However, Chris Whalen, managing director of residential real estate firm Carrington Holding Co., says Fed policy is wholly inadequate to boost economic growth and stave off deflation.

"The policies being followed at the Fed and White House are stifling job creation, even as they encourage moral hazard and the growth of new bubbles in the financial sector," he writes in an article for Breitbart.

Editor’s Note: 38 Trades That Could Turn $1,000 Into $49,000

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