In a short trading week, Tuesday sets up to be the busiest day for investors with a decent run of earnings to note as third quarter earnings season tails off.
Notable earnings reports expected Tuesday include Campbell’s Soup (CPB), Lowe’s (LOW), Dollar Tree (DLTR), and salesforce.com (CRM). We’ll also get results from both HP Inc. (HPQ) and HP Enterprise (HPE).
On the economic calendar, the only notable report will be the October reading on existing home sales.
While in Washington, D.C. lawmakers are back in their home districts for Thanksgiving with next week expected to see an intense push on tax reform from Senate Republicans. All will not be quiet in the nation’s capital, however, as President Donald Trump is set to pardon his first set of turkeys since taking office at 1 p.m. ET.
Federal Reserve Chair Janet Yellen is leaving more than just her post at the top of the central bank in February. Yellen is leaving the Fed’s board of governors completely.
Yellen, who was appointed to a 14-year term on the board in 2010, said Monday she will resign from the board after Jerome Powell, a current member of the board of governors, is sworn in as the new head of the central bank.
Yellen’s departure is not entirely unexpected, but leaves yet another opening at the central bank for the Trump administration to fill.
When Powell was named by Trump as his nominee to replace Yellen, economists noted that in the likely event Yellen were to resign from the board of governors after Powell took office, changes at the Fed were far from done.
“The transition at the Fed goes well beyond the appointment of Governor Powell,” said Eric Winograd, senior U.S. economist at AllianceBernstein.
“If Chair Yellen resigns from the Board upon the expiration of her term as Chair early next year there would be only 3 of the 7 seats filled, and the Vice Chair role is one of the empty ones. At least one additional Governor will need to be seated by that time to allow the Board of Governors to function.
“The appointment of a strong Vice Chair in particular is important; there are gaps in Powell’s resume and having somebody nearby who fills many of those gaps would offer some reassurance.”
Winograd added that Powell and current governor Lael Brainard are likely to be the only members of the FOMC, the Fed committee that votes on monetary policy, with more than a year of experience on the FOMC by the middle of 2018.
“That lack of institutional memory and expertise could prove problematic should the economic outlook change notably,” Winograd said.
And while some have noted that at the Fed, the economic staff — which has more continuity away from the appointed officials who lead the central bank — drives a lot of the thinking on monetary policy, there is a clear opening for even more shaping of the Federal Reserve under the Trump administration.
As with any administration, tent pole legislation like an overhaul of the tax code or an effort to repeal the previous administration’s signature legislative accomplishment is going to garner the most headlines. But the less visible moves now available for Trump to make at the world’s most powerful central bank might offer him an opportunity to make some of his most lasting impacts as president.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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