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UBS Chief Economist: Federal Reserve's stance may lean toward the hawkish side, raising concerns about his independence
Svmuu News: Paul Donovan, chief economist at UBS, wrote that launching a criminal investigation into the current Federal Reserve chairman could ultimately help strengthen the central bank’s independence.Market reactions indicate that investors are growing increasingly concerned about Federal Reserve’s ability to manage interest rates free from political interference. Although asset prices have remained largely stable overall, long-term U.S. Treasury yields have risen while the dollar has weakened.Donovan noted that Jerome Powell’s firm stance may indicate his reluctance to step down from his Federal Reserve board seat this year; simultaneously, there are signs that the U.S. Senate may delay confirming the nominee for the next Federal Reserve chair. He also pointed out that market concerns over central bank independence could translate into a hawkish force in future monetary policy decisions. (Jin Shi)
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