Blog: New Jerome Powell Controversy – AGF Perspectives

For Print Only Logo

Insights and Market Perspectives

IT HASN’T BEEN AN EASY STRETCH for Jerome Powell. The Fed Chairman now faces another controversy, this time over his push to change the wording of the statement issued on Sunday night about supporting banks.

THE NEW YORK TIMES REPORTS this morning that Powell objected to a passage that Biden aides wanted in the statement that supported a thorough spotlight on “shortcomings in financial regulation that contributed to the banks’ rapid descent.”

BUT POWELL, ACCORDING TO THE TIMES ACCOUNT, blocked efforts to include a phrase citing regulatory failures in the joint statement that was released Sunday evening. The talks became tense, as Biden aides insisted that lapses in bank regulation and supervision had contributed to the problems that weakened the bank.

POWELL WANTED TO FOCUS on steps to shore up the financial system, and he prevailed — the statement did not cite regulatory lapses. But there was an immediate focus on the San Francisco Fed, which was viewed by some insiders as overly cozy with the Silicon Valley Bank.

THE BANK’S PRESIDENT, Greg Becker, served on the San Francisco Fed’s board of directors. Becker drew immediate criticism for selling $3.6 million in the company’s stock just days before the bank failed, and SVB’s chief compliance officer left last April with no replacement until late last year; he lives in New York, not Calironia.

BY MONDAY THE REVELATIONS may have prompted Powell to change his tune. The SVP collapse demands a “thorough, transparent and swift review by the Federal Reserve,” Powell stated. Congressional hearings could embarrass the Fed, Hill sources tell us; politicians on the left and right are increasingly critical.

THIS WON’T BE THE FIRST TIME the Fed came under criticism for lax regulatory policy; several top officials have been eased out of the Fed for excessive trading on their personal accounts, which shocked Fed veterans. The Fed was always considered “squeaky clean.”

MORE THAN JUST REGULATORY LAPSES: Powell’s detractors believe he has done a poor job on monetary policy. The Fed Chairman clearly missed the inflation surge, claiming for months after prices began rising that it was “transitory.” Once it became clear that inflation would persist, he hammered the economy — housing in particular — with a monetary sledgehammer.

FED INSIDERS LIKE POWELL PERSONALLY, but they point out that he doesn’t have a PhD in economics, like most of his predecessors, and may not be a “wartime consigliere” as they said in The Godfather. Powell’s second term expires in 2026, and it’s a pretty safe bet that there will not be a third term.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit

©2023 AGF Management Limited. All rights reserved.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s