Federated Investors' latest "Month in Cash" explains, "For an entity whose leader has essentially been let go ("You're fired") by the new boss, the Federal Reserve (Fed) is expected to have a smooth transition from Chair Janet Yellen to incoming head Jerome Powell. Down the road, Powell undoubtedly will put his stamp on policy, and probably financial regulation, as well. But in the short term, the shift should be like a copilot taking the controls when the pilot needs a break. Of course, that doesn't happen when the airplane is fighting turbulence.... Given the amount of open seats on the FOMC -- four now and five if New York Fed President William Dudley retires and the Senate doesn't confirm Marvin Goodfriend -- Powell might be best served letting the dot plot and other projections do the talking. That the tapering of the balance sheet has begun on a set path will help.... Challenges are on the horizon, including the pace of rate hikes if inflation wakes up -- or animal spirits rouse it -- and the potential that wages finally take off. I didn't mention the debt ceiling as a challenge because we have very few concerns that the government will allow a technical default. We have been down this path before. But that's our strategic outlook; tactically, we are preparing for it by generally avoiding trades in the 4- to 6-week range unless they are slam dunks. Those still exist because the market has no consensus on exactly when the Treasury would run out of extraordinary measures and have to go to, well, even more extraordinary measures. As of now, there's not been much pressure on any particular bills."

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