President Trump is expected to nominate Jerome H. Powell as the next chairman of the Federal Reserve, replacing Janet L. Yellen, whose term expires early next year, according to two people familiar with the plans.
Mr. Powell, a Fed governor since 2012, is a Republican with deep roots in the party’s establishment and in the financial industry. He has steadily supported Ms. Yellen’s approach to monetary policy and financial regulation, creating an expectation that he would be unlikely to attempt large or sharp changes in the Fed’s course.
One White House official described Mr. Powell as a “safe” choice as well as the candidate who most closely fit Mr. Trump’s penchant for filling top jobs with characters from “central casting,” as he has often put it.
Both people familiar with the president’s thinking, who spoke on the condition of anonymity, cautioned that Mr. Trump was notoriously mercurial and liked creating drama around important personnel decisions. However, both said the president appeared set on Mr. Powell. An announcement could come as soon as Thursday after the Fed wraps up a two-day policy meeting on Wednesday and before Mr. Trump leaves on Friday for a 12-day Asia trip.
The choice would cap an unusually public selection process, during which the president has openly discussed his views of various candidates, asked Republican senators to vote by raising their hands for those under consideration and sought the opinion of a television host. Mr. Trump also posted a video on Instagram promising “everybody will be very impressed” with his selection.
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In looking past Ms. Yellen, Mr. Trump would be breaking with longstanding precedent. Every Fed chairman in modern history who completed a first four-year term was nominated for a second. The last three Fed chairmen were nominated for new terms by a president of the opposite party. And Mr. Trump has praised Ms. Yellen’s performance: During her four years, unemployment has fallen sharply, inflation has remained low and the economy is growing.
“You like to make your own mark,” Mr. Trump said last week, by way of explanation.
In choosing Mr. Powell, however, Mr. Trump would be resisting pressure by conservatives to make a larger mark on the Fed’s management of the economy. Many conservatives, including Vice President Mike Pence, favored the selection of John B. Taylor, a Stanford economist who has been an outspoken critic of the Fed’s monetary policy.
Mr. Powell, by contrast, has voted for every Fed policy decision since 2012, although he expressed some reservations in internal debates about the extent of those efforts. In recent years, he has backed the methodical unwinding of the Fed’s stimulus campaign, which involved purchasing $4 trillion worth of Treasuries and mortgage-backed securities to help the economy recover from the 2008 financial crisis.
Fed officials are often labeled hawks if they favor higher interest rates to control inflation, or doves if they want to keep rates low to promote job growth. Richard Fisher, a former president of the Federal Reserve Bank of Dallas, who worked with Mr. Powell at the Fed, said Mr. Powell “is neither a hawk nor a dove.”
“I used to say that we all want to be wise owls,” he added, “and I think that he fits that category very well.”
Mr. Fisher said Mr. Powell was moderate to a fault. “I’ve tried to get him to drink more than two glasses of wine at dinner, and he will not do it,” he said.
A survey of 144 investors conducted by Evercore ISI found that they expected that Mr. Powell would push rates modestly higher than Ms. Yellen over time.
Mr. Powell also has sought a middle ground on the contentious debate over financial regulation. Mr. Trump and congressional Republicans argue that excessive regulation is restraining economic growth. At a Senate hearing in June, Mr. Powell agreed that there was room to improve regulation, but he described the Trump administration’s proposals as a “mixed bag,” adding that he opposed some of the specific proposals.
Describing an effort already underway at the Fed, he said, “The whole idea is to preserve the significant core reforms that were made but to go back and clean up our work.”
source : nytimes.com