Federal Reserve Chairman Jerome Powell, in his speech at Stanford University’s Hoover Institution on Monday, deliberately avoided mentioning the current US economic situation as well as the direction of the Fed’s monetary policy. This was the opening part of an important academic event, and Powell made it clear from the first sentences that he would not discuss economic developments or any upcoming policy decisions of the Fed. This avoidance has made observers pay more attention, as the Fed’s policy meeting is taking place in the near future and global markets are waiting for new signals on interest rates.
Powell devoted much of his speech to paying tribute to the late Secretary of State George Shultz, a figure who had a profound influence on American foreign policy and economics in the 20th century. Powell described Shultz as “one of the most successful policymakers of his time,” who brought academic thinking to political decisions that were always complex, limited, and challenging. He emphasized that Shultz, who served as secretary of state four times, handled many of America’s most important issues “with remarkable success,” thereby leaving a legacy that Powell said was “deeply cherished.”
Powell's speech was made all the more remarkable because just a day earlier, US President Donald Trump said he had decided on the personnel for the position of Fed Chairman for the next term. On Air Force One when returning to Washington, Trump revealed to the press that he "already knows who he will choose" but has not yet announced the identity, and affirmed that an official announcement will be made soon. Financial markets quickly reacted, because the decision to appoint a new Fed Chairman always has strategic significance for the interest rate roadmap, inflation control and US economic stability.
