UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'A reluctant defense of Powell'
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Aug 22, 2025 The podcast dives into the challenges of Jerome Powell's leadership as he approaches a crucial speech. There's a discussion on the implications of political pressure on the Fed's independence and concerns about his vision for monetary policy. The analysis extends to global economic trends, highlighting inflation variations and GDP growth in Germany. Additionally, the role of media in shaping economic sentiment and consumer confidence trends in Japan and the UK are examined, painting a complex picture of the current economic landscape.
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Powell Lacked Medium-Term Vision
- Paul Donovan argues Jerome Powell lacked a clear medium-term policy vision during major structural change.
- He views Powell's reliance on 'data dependency' as problematic because data quality has deteriorated.
Thoughts On The Powell Appointment
- Donovan states that President Trump's appointment of Powell was an error and that Yellen might have been better suited.
- He notes Yellen's strengths in handling structural labor-market measurement issues.
Data Dependency Risks Policy Error
- Donovan says data dependency is backward-looking and risky when data quality erodes.
- He warns chaining policy to unreliable data adds volatility and risks policy error.