Biden to Reappoint Powell as Fed Chair

Plus: Investors, History is on Your Side You are receiving this limited-time email resource as a subscriber to Kiplinger's free e-newsletters. To unsubscribe at any time, simply click the link in the footer below. NOVEMBER 22, 2021 [View in browser]( HOW TO PROTECT AND GROW YOUR BUSINESS AND INVESTMENTS NOW President Biden reappointed Jerome Powell as Federal Reserve chair today, greatly calming financial markets, while disappointing the progressive wing of his own party. But progressive Democrats didn’t come away empty-handed. Biden also appointed Lael Brainerd, favored by progressives, as vice chair and is likely to nominate someone for vice chair of supervision who favors stricter oversight of financial institutions. Finally, the president will get to choose three new governors for the Federal Reserve Board who are likely to be “dovish,” i.e. favor continued low interest rates, despite inflation threats. --------------------------------------------------------------- SPONSORED CONTENT FROM VANGUARD PERSONAL ADVISOR [Custom Strategies to Help Create More Income in Retirement]( Vanguard Personal Advisor Services® is built to provide you an ongoing collaboration with our professional advisors — no matter where you are. Our advisors are salaried and don't earn commissions, so they'll always put your best interests first. Take the first step with [Vanguard today](. [READ MORE]( --------------------------------------------------------------- Despite Biden’s picks for the upcoming Fed vacancies, progressive influence is likely going to be limited to promoting tougher bank regulation at the edges. Traditionally, the Fed chair wields outsize influence on the direction of interest rate policy, so expect that Powell will raise interest rates this fall to fight inflation, as expected. Also, three dovish regional Federal Reserve bank presidents will be replaced on the rate-setting Federal Open Market Committee by hawkish presidents favoring rate hikes for 2022. Four of twelve seats on the FOMC are filled by Fed regional bank presidents who rotate their membership on the FOMC yearly. Any look at stock-market seasonality needs to be taken with a grain of salt. (“Past performance isn’t indicative of future returns” is boilerplate for a reason.) But CFRA Chief Investment Strategist Sam Stovall notes that history is indeed portending good things for the rest of the year. “From the October low of every year since 1945 through the year-end close, the S&P 500 gained an average 7.2% in price and posted a positive performance in 92% of the years. This year, the S&P 500 has risen 9.2% from the Oct. 4 low through Nov. 19, when it just barely missed setting a new high,” he says. While that might indicate the market has perhaps overshot and that we’re due for a pullback, Stovall adds that “the S&P 500 still has a good shot of posting an even higher return, as 37% of all years (28 times) the S&P 500 recorded an increase in excess of 9.2%...the average for these 28 observations was 12.7%.” Just remember: The market seemingly never goes anywhere in a straight line, and that likely will be the case even if we do get additional upside in 2021. Per Stovall: “The recent uptick in global COVID-19 cases may continue to place additional near-term pressure on share prices before dissipating and allowing prices to hit new highs before the year is out.” Free download, [The Kiplinger Letter's Forecast](. No information required from you. SPONSORED CONTENT FROM SMARTASSET [Hire a Pro: Compare 3 Financial Advisors Near You]( Ready to kick your retirement plan into high gear? Compare fiduciary financial advisors in your area. [READ MORE]( LATEST INVESTING NEWS FROM KIPLINGER.COM [15 Bitcoin ETFs and Cryptocurrency Funds You Should Know]( [Watch Out for Job Listing Fraud]( [The 30 Best Stocks of the Past 30 Years]( [How To Protect Your Retirement Portfolio Against Market Pullbacks]( [Sign Up Free for Kiplinger's Retirement E-Newsletter to Plan for and Make the Most of a Richly Rewarding Retirement]( [Kiplinger] [Facebook]( [Twitter]( [LinkedIn]( Send this to a friend. [Click here.]( All content ©2021 The Kiplinger Washington Editors 1100 13th Street, NW, Suite 1000 Washington, D.C. 20005 Thank you for subscribing to Kiplinger's A Step Ahead, a free resource to help readers navigate the economic recovery from COVID-19. If you ever wish to stop receiving this service, please [click here to unsubscribe](.