US President Donald Trump will announce his pick for the next Chair of the Federal Reserve on Thursday, the media…
US President Donald Trump (Photo: AFP)
US President Donald Trump will announce his pick for the next Chair of the Federal Reserve on Thursday, the media reported citing White House officials.
All indicators so far are that Trump is most likely to nominate current Fed Governor Jerome Powell for the post, Xinuhua reported on Monday citing CNBC.
Trump has recently finished interviews of five candidates for the next Fed Chair, including Powell, Stanford University economist John Taylor, former Fed governor Kevin Warsh, White House National Economic Council Director Gary Cohn and current Fed Chair Janet Yellen, whose term expires next February.
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Trump’s advisors have been steering him toward choosing either Powell or Taylor for the job, according to the local media. Powell is favoured by Treasury Secretary Steven Mnuchin, while Taylor is favored by Vice President Mike Pence.
While Powell and Taylor are both Republicans, they would have much different approaches to running monetary policy at the central bank.
Powell is likely to continue Yellen’s gradual and cautious approach to tightening monetary policy, while Taylor, who has advocated for a stricter policy rule, is considered more hawkish on raising interest rates.
“If Trump nominates Powell to replace Yellen, it will imply continuity in the Federal Reserve’s interest rate and the balance sheet policy, at least for a time,” said Lewis Alexander, US chief economist at Nomura.
The Fed is expected to keep interest rates unchanged this week after wrapping up the two-day policy meeting on Wednesday.
Many Fed officials have signalled that a further rate hike in December is likely to be warranted if the US economic outlook remains broadly unchanged.
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