U.S. President Donald Trump has discoursed with National Economic Council Director Gary Cohn, Federal Reserve Chair Janet Yellen, former governor Kevin Warsh and Fed board governor Jerome Powell last week because he has been considering who will be the next boss of the U.S. central bank.
According to three people who are familiar with the discussions, White House is searching for a new Fed chair and hopes to have a decision in December 2017. Two administration officials said that on last Wednesday, Jerome Powell was interviewed by Mr.Trump and Treasury Secretary Steven Mnuchin, while Janet Yellen and Gary Cohn had conversed with both before. Meetings with other candidates are also being arranged.
“I’ve had four meetings for Fed chairman, and I’ll be making a decision over the next two or three weeks,” Trump told reporters before boarding the presidential helicopter at the White House.
Kevin Warsh, 47, currently a fellow at the Hoover Institution, continues to remain on the short list of potential candidates and is likely to surpass others to win the ticket for Fed chairman. Of course, this is not a coincidence since Warsh’s father-in-law, Ronald Lauder, is a billionaire and long-time friend of Trump's. According to a source close to the process, Warsh and Trump did have a positive conversation on last Thursday.
Meanwhile, Jerome Powel, a 64-year-old man, is the only Republican on the Board of Governors. Since Daniel Tarullo retired, Powel has built a substantial reputation amid lawmakers from both parties and led the Fed’s regulatory efforts. He also spent eight years at private equity firm Carlyle Group before participating in politics.
Janet Yellen, Fed’s current leader whose term will expire in the second month of 2018, also remains a very potential candidate at the moment.
“In terms of policy, I think it is fair to say that Warsh is less dovish than Yellen,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “He would be less in favor of fine tuning and more sympathetic to the Fed’s role simply being to operate quietly in the background and let the private sector drive things forward.”
Trump’s advisers are trying to arrange a string of options for him. Selecting a qualified person for this crucial position is very, very important because the Fed is responsible for safeguarding not only the U.S. economy but also global financial stability.
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