Trump expected to name Powell as next Federal Reserve
chair on Thursday
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[November 02, 2017]
By Jeff Mason and Steve Holland
WASHINGTON (Reuters) - President Donald
Trump is expected on Thursday to nominate Jerome Powell as the next head
of the Federal Reserve, putting his own stamp on the leadership of the
U.S. central bank while signaling continuity on monetary policy.
Trump's decision, scheduled for Thursday afternoon, concludes a
months-long process in which he considered five finalists, including
current Fed Chair Janet Yellen, before settling on Powell, who has
served as a Fed governor since 2012.
Powell's name has been circulated as the top contender for over a week.
A source with knowledge of the process said no surprises were expected
on Thursday, despite Trump's reputation for weighing decisions up to the
last minute and his praise on Wednesday of Yellen, who was nominated by
Democratic President Barack Obama. Her term as Fed chair expires in
February 2018; she is entitled to remain a Fed board governor until
"I think Janet Yellen is excellent," Trump told reporters during a
meeting with his cabinet after declaring his intention to announce his
choice the next day. Asked if she was his pick, Trump said: "I didn't
He predicted people would be "extremely impressed" with the nominee, who
will require Senate confirmation.
Trump will announce his choice at 3 p.m. (1900 GMT) at the White House,
according to his public schedule.
Powell, 64, has supported Yellen's general direction in setting monetary
policy, and in recent years has shared her concern that low inflation
justified continuing with a cautious approach to raising interest rates.
Commerzbank economist Bernd Weidensteiner said a Powell pick would mean
Trump had chosen the "least controversial" person for the job. "Under
his chairmanship, markets would expect business as usual – which they
obviously like," he said.
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Jerome H. Powell, a governor on the board of the Federal Reserve
System, prepares to testify to the Senate Banking Committee on
Capitol Hill in Washington, U.S., June 22, 2017. REUTERS/Joshua
The president has mulled his choices for Fed chair, a decision that is normally
cloaked in secrecy, in an unusually public way, asking lawmakers and even a
television news anchor to weigh in on whom they would pick.
Trump also considered Stanford University economist John Taylor, former Fed
Governor Kevin Warsh, and White House economic adviser Gary Cohn.
Taylor and Warsh were both viewed as people who might raise interest rates
faster than Yellen and Powell. Cohn appeared to fall out of favor after
criticizing Trump's reaction to the violence in Charlottesville, Virginia,
earlier this year.
Financial markets look set to greet Powell's appointment with a shrug. Investors
are pricing in an interest rate increase in December and the Fed's current
projections are for three more increases next year.
Powell is expected to pursue a policy of cautious deregulation of the financial
sector, potentially freeing smaller banks from some of the rules imposed after
the 2007-2008 financial crisis.
Powell, who has been a Federal Reserve board governor since 2012, played a key
role in drafting new bank regulations after the crisis and will likely offer
more continuity for Wall Street than other candidates, analysts said.
(Reporting by Jeff Mason and Steve Holland; Editing by Larry King)
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