Listen to this article
This article is from today’s FT Opinion email. Sign up to receive a daily digest of the big issues straight to your inbox.
Jay Powell will make his first appearance at the Senate Banking Committee this week. It is a big moment for the new chairman of the US Federal Reserve — his first opportunity to step out of the shadow of Janet Yellen, his predecessor, and define his own views. American politicians can also use this moment to ask some key questions about where the economy is heading and how he intends to shape monetary policy.
Rana Foroohar puts forward three issues on which she would like to hear Mr Powell’s views in her latest column. First, is the central bank’s focus on pre-empting inflation wrong, given that wages have barely budged? Second, is the increasing concentration of power in the US economy a problem? And third, if the US economy begins to sink, would the Fed chair choose to support stocks, bonds or the dollar?
During Ms Yellen’s tenure at the Federal Reserve, the US economy was blessed with low rates and an easy flow of money. Rana points out these circumstances buoyed the economy and limited the pain for ordinary citizens. But at some point, the central bank will run out of fire power and politicians will have to take over. This could prove Mr Powell’s greatest challenge.
Avoiding the worst of all post-Brexit worlds
Wolfgang Münchau predicts in his column that the UK will end up in a customs union with the EU. But Brussels will not want Brexit Britain to become entirely detached from the bloc, so it will come with stringent conditions.
Gavin Kelly blames bad British bosses for some of the country’s productivity problems. The link between employee happiness and national prosperity is rarely frequently made, he argues, and job satisfaction needs to improve.
Nick Clegg says the May government’s strategy of dividing Britain’s post-Brexit needs into “three baskets” would create a more statist economy: the very kind of managed market system that Conservatives once rallied against.
Best of the rest
How Billy Graham Changed My Life — George W. Bush in the Wall Street Journal
Embracing soft Brexit would be risky for Corbyn. But it’s still the smart move — Matthew d’Ancona in The Guardian
The Edges of Reason — Ross Douthat in The New York Times
If this is what conservatism has become, count me out — Max Boot in The Washington Post
Angela Merkel is about to pay for the ‘Mutti’ of all blunders — Niall Ferguson in The Times
What you’ve been saying
To give a child fizzy drinks is bordering on neglect — letter from Linda Greenwall:
The Dental Wellness Trust wants to see an age restriction for children under 12 years old from buying fizzy drinks, and an all-out ban on children under the age of six years old from consuming them. As dentists, we sadly have to extract teeth from children as young as three due to their consumption of fizzy drinks. This trend continues right up until teenage years and there is no improvement in sight. There is no escaping the exposure to these drinks.
Morally, how can we allow this to continue without taking a firmer stance to protect the health of future generations? I believe our proposed ban would have a dramatic impact on their consumption, but more importantly on the overall health of the child.
Comment from Hedge_blonde on Taking an arts degree? Do the maths:
The emphasis on the importance of STEM subjects hopefully will lead to more inter-disciplinary learning and overcoming the traditional humanities/quant division. I thought Piketty’s Capital challenged the economics status quo in some very constructive ways. It’s a combination of history and statistical analysis. Then again, an economist won’t get much respect from a physicist as a scientist.
We can’t leave formation of education policy to the PPE graduates. They are blinkered by their concentration on leading centralised government and creating better yesterdays.
Murderous diehards have no place in civilised society — letter from Albion M Urdank:
Murderous diehards, especially those who presided over beheadings, cannot and should not be reintegrated into civilised society. If the aim of prosecuting them is to effect their rehabilitation, then the Financial Times is embracing a dangerous delusion (including the notion that some remaining diehards may be “innocent of terrorist intent”). Gavin Williamson, the UK defence secretary, is right to propose leaving them to local justice, for whether they are naturalised Britons or indeed born British, they have forfeited their nationality by their grotesque adherence to the barbarism of Isis.
Instant Insight: US corporate moves to cut ties with the NRA do not go far enough Boycott by anti-gun activists comes as companies are under pressure to take sides
Bad bosses are making Britain’s productivity puzzle worse Mediocre management is often the product of a flawed business model
A customs union would avoid the worst of all post-Brexit worlds The EU is likely to approve such a deal, but it would also impose stringent controls
Three questions for Federal Reserve chairman Jay Powell The Senate should ask about wage compression, power concentration and share buybacks
What to look for in Jay Powell’s inaugural address Powell was the continuity candidate for the Fed chair but he faces issues that will soon force him to get off the fence
The US risks making a strategic blunder over China Washington mistakenly views its relationship with Beijing as a power struggle
FT View: Setting the bar higher for Chinese takeover offers Deals must meet standards of reciprocity, transparency and security
FT View: The threat of regional conflagration in Syria The demise of Isis threatens yet more dangerous times to come
The Big Read
The Big Read: Trump’s protection plan to keep ‘competitor’ China at bay The US wants more scrutiny of deals with Chinese companies but critics fear the system will hurt innovation