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Washington (AFP) – Former investment banker Jerome “Jay” Powell was sworn in Monday as the 16th leader of the US Federal Reserve, taking a key role in overseeing the world’s largest economy.

Perhaps the wealthiest Fed chair ever, Powell, 65, takes the reins of monetary policy just as a decade of economic recovery has begun to crest, and as analysts are pointing to challenges on the horizon.

Powell said he was committed to explaining the Fed’s policy moves, a signal likely to be welcomed by conservative lawmakers who have called for the central bank to follow strict formulas in setting interest rates  — a requirement Fed officials have opposed.

Powell also said the banking reforms enacted since the 2008 crisis made the financial sector stronger.

“We intend to keep it that way,” he said in comments after taking the oath of office. 

But he struck a note of balance, perhaps a nod to the Trump administration priority to reduce regulatory burdens in the economy.

“We will also work hard to make sure that our regulation and supervision are efficient as well as effective,” Powell said.

“At the Federal Reserve, we know that our decisions matter for American households and businesses.” 

Powell joined the Fed as a governor appointed by then-President Barack Obama in 2012, the year the Fed adopted a two percent target for annual inflation.

Inflation has run below target since then, allowing former Chair Janet Yellen to leave the post amid low price pressures, steady growth and rising employment. 

Despite her solid record, Yellen, the first woman to lead the Fed, became the first Fed chief in four decades not to be reappointed to a second term.

Powell, who is not an economist, takes over just as fears arise about fiscal pressures following December’s massive tax cut and concerns inflation may finally be poised to heat up.

The new Fed chief is likely to make the first of regular public appearances in the usual semi-annual testimony before Congress later this month, followed by his first press conference after the March policy meeting.

The Fed indicated in December it expects to raise the benchmark interest rate three times this year, and the first move is widely expected to come in March.