(Bloomberg Gadfly) -- If there's one thing President Donald Trump likes as much as himself, it's people who have money. (See Steven Mnuchin, Rex Tillerson, Wilbur Ross and Gary Cohn, to start.)
On that score, Jerome Powell, whom Trump is widely expected to nominate as the next Federal Reserve chairman, should fit right in. In fact, he's probably wealthier than most people realize.
Powell, who is already a Fed governor, is a former Carlyle Group executive and investment banker. Most reports have pegged his wealth at as much as $55 million. His actual net worth could be double that. The $55 million figure comes from his most recent financial disclosure form. But that form leaves off much of the value of what is likely Powell's largest asset, his investment in the Vanguard Total Stock Market index fund.
Powell's investment in the fund is listed on the form as "over $1 million," and so most reports have valued the holding at the seven-figure mark. But Powell's disclosure also says he received as much as $1 million in income from the fund in the past year. The dividend yield of the Vanguard Total Stock Market index fund has been 1.71 percent over the past 12 months. For Powell's investment in the fund to generate that much income, it would have to be worth as much as $58.5 million, putting his total potential wealth at more than $112 million.
The fact that arguably one of the most important people in the economy is also among the top 0.1 percent -- nearly 800 times richer, even after adjusting for inflation, than Paul Volcker was when he headed the Fed -- could shade Fed policy. Perspective matters. For example, when the Fed under Ben Bernanke lowered interest rates to near zero and kept them there, critics contended he was hurting savers. But the only savers hurt were really wealthy ones. Bernanke, thankfully, shrugged off the criticism. Would someone worth 40 times as much with more of a Wall Street sensibility do the same?
More important, the income and wealth gap is one of the biggest issues facing the economy. Many economists say it is a reason growth has remained sluggish. The Fed can play a role in trying to narrow that gap, or at least limit its growth. One way is how it regulates Wall Street, from potentially limiting compensation to overseeing products offered to Main Street investors. But Powell is expected to loosen regulations. He said recently, when asked, that the biggest challenge facing the economy is that it is not growing fast enough. He didn't mention the wealth gap.
On one important measure on the Trump scorecard -- the stock market -- wealth doesn't seem like a great predictor. Stocks rose an average of 7.5 percent a year when William McChesney Martin, one of the wealthier Fed chairman, was at the helm for 19 years. Arthur Burns, a professor and one of the most modest Fed chairs, presided over a near-enemic stock market. But the market soared under Paul Volcker, who told the New York Times in 1982 that he was worth just $56,000. Perhaps more significant, Powell is expected to continue a pattern of gradual rate increases and not accelerate them. More rapid increases could stifle the stock rally that the president likes to cite so much as a barometer of his success.
The fact that yet another one of Trump's appointments is a member of the nine-figure club matters. Trump and his closest advisers look at the economy from the top down. The view from up there can make it hard to focus on what's best for those who are looking up.
-- Chloe Whiteaker contributed the "Fed Funds" graphic.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Stephen Gandel is a Bloomberg Gadfly columnist covering equity markets. He was previously a deputy digital editor for Fortune and an economics blogger at Time. He has also covered finance and the housing market.
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