Trump Ramps Up Fed Chair Search With Decision Due Within WeeksBy , , and
The President met with Jerome Powell and Kevin Warsh this Week
Fed chief Yellen and Trump aide Cohn are also being considered
Donald Trump in the next few weeks will make one of the most consequential decisions of his presidency with the choice of a nominee to be the next chair of the Federal Reserve, and the selection process is accelerating as he meets with top contenders.
The president and Treasury Secretary Steven Mnuchin sat down Thursday with former Fed governor Kevin Warsh and interviewed Fed Governor Jerome Powell Wednesday, three administration officials said. He’s also met with current Fed Chair Janet Yellen and White House economic adviser Gary Cohn, who are both in the running for the post, the officials said.
Conversations with additional candidates are already in the works as Trump aides try to give him a range of options, said one of the officials, who didn’t identify those contenders.
“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 Friday before boarding the presidential helicopter at the White House as he traveled to his golf club in Bedminster, New Jersey for the weekend.
The selection is one of the most important facing Trump, who claims credit for an economy that’s reduced unemployment to the lowest level in 16 years. The Fed is tasked with safeguarding U.S. growth and stable prices and overseeing financial stability.
News of Warsh’s White House visit, whether an inadvertent leak or a deliberate trial balloon to test market and political reaction, sent bank stocks higher and lifted Treasury yields. Investors weighed a potential Fed pick who might aggressively promote the administration’s agenda to reduce financial regulation and raise interest rates faster.
“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 in New York.
Warsh, 47, who served as Fed governor from 2006 until 2011, didn’t respond to a request for comment through the Hoover Institution, where he is currently a fellow. The Fed declined to comment on any of the meetings.
Others previously identified by administration officials as potential contenders for Fed chair include Stanford economist John Taylor, former BB&T Corp. CEO John Allison and Columbia University economist Glenn Hubbard.
Yellen’s term as Fed chair ends Feb. 3 and time is getting tight to make a selection and get it through Congress. The president nominates the head of the central bank, subject to Senate confirmation. That could make potential political opposition a factor as the White House considers candidates.
Warsh, a close associate of hedge-fund billionaire Stanley Druckenmiller who worked at Morgan Stanley before joining the White House of President George W. Bush, has already drawn opposition from left-leaning activists, particularly for his pre-crisis cheerleading of Wall Street innovations.
“We would definitely come out against him if he was the nominee,’’ said Jordan Haedtler, the campaign manager for FedUp, a grassroots group that has sought more diversity at the central bank.
Warsh is married to Jane Lauder, daughter of Trump friend Ronald Lauder and a global brand president at the cosmetic company founded by her grandmother, Estee Lauder.
Powell had been regarded as a long-shot candidate, but not out of the running for Fed chair. The only Republican currently on the Board of Governors, Powell, 64, has a solid reputation among lawmakers from both parties and has ably led the Fed’s regulatory efforts, albeit on a temporary basis, since Daniel Tarullo retired in April. Critics of the Fed’s role in carrying out stricter post-crisis banking rules could hold his tenure on the board against him.
Before joining the Fed, Powell spent eight years at private equity firm Carlyle Group. He also served as a senior official at the U.S. Treasury under President George H. W. Bush.
Trump said in July that both Yellen and Cohn were being considered for the job, as well as other candidates.