I’m not a big fan of the people that Barack Obama appointed when he was President, Timothy “Eddie Haskell” Geithner particularly comes to mind, but generally they were light-years ahead of anyone that Trump appointed.

There is one exception though, and it’s a big one, because Jerome Powell, who Donald Trump appointed as Chairman of the Federal Reserve to replace Janet Yellen, is immeasurably better than the now Treasury Secretary.

Much as she did as Fed Chair, Secretary Yellen is reacting to non-existent inflation, and calling for rate hikes.

Powell, the first non-economist Fed Chair in Decades, gets it in a way that economists don’t: 

Starting in 2018, President Trump harangued and hammered Fed Chair Jerome Powell to end Quantitative Tightening and to cut interest rates, and Powell buckled and did his infamous “180.” And now suddenly – unless this gets walked backed again tomorrow – we’ve got the opposite. Treasury Secretary Janet Yellen said in an interview with Bloomberg News on Sunday that higher interest rates would “actually be a plus for society’s point of view and the Fed’s point of view.”

Under Fed Chair Yellen, the Fed hiked interest rates five times, starting in December 2015. Yellen departed in February 2018 as Trump had refused to reappoint her, and instead replaced her with Powell. At the time, the sixth rate-hike was already baked in for the March 2018 meeting. She is no stranger to rate hikes.

Now Yellen – presumably with the backing of President Biden – is supporting Powell on rate hikes, which is a dramatic shift from the prior administration.

I will reiterate something that I have said many times, “If you have a problem, the conventional wisdom is ALWAYS wrong, because if it were right, the problem would already have been fixed.”

Janet Yellen is relentlessly conventional, which means that she is relentlessly wrong.