What does Powell mean for markets? - ING

Analysts at INg explained that Powell is seen as the safe choice. He will continue with the Fed’s gradual policy tightening and adopt a softer tone to regulation, while also having bi-partisan support. As a result his confirmation hearings are unlikely to be too controversial. 

Key Quotes:

"Given the strong economy and jobs market, inflation pressures gradually building and Fed officials broadening out the reasons behind hiking – such as financial conditions, asset valuations and financial stability issues – we are still sticking to our view of a December rate hike. This is more than 90% priced in by financial markets with the main risk coming from the potential for an economically damaging government shutdown in the absence of agreement to raise the debt ceiling.

Under the leadership of Powell we expect two more 25bp Fed rate hikes in 2018 rather than the three the Fed have currently pencilled in. This is mainly down to the Fed’s balance sheet reduction strategy doing some of the heavy lifting to tighten financial conditions, reducing the need for hikes at the short-end of the curve."