‘None are going to be major disrupters’, but Trump’s choice for next US Federal Reserve chair depends on interests
Stick with the current chair, an Obama appointee who has kept rates low and markets happy? Or switch to a Republican more favourable to a deregulation agenda?
President Donald Trump says he is “very, very close” to naming the next Federal Reserve chief, building suspense toward perhaps the most consequential decision he has left to make in 2017.
But the sweepstakes to pick the new Fed chair, likely to be decided before Trump departs for Asia in 10 days, finds the new president pulled in different directions.
Stick with the current chair, an Obama appointee who has kept rates low and markets happy? Or switch to a Republican more favourable to the Trump administration’s deregulation agenda?
For most presidents, giving Janet Yellen another four-year term would be the obvious move: unemployment is falling, inflation is low and, despite whipsawing hurricanes, the economy is growing. By any measure, Yellen has performed very well.
Furthermore, for the past 40 years or so, Fed chairs have been passed like batons between presidents, with the newest White House occupant reappointing the occupant of the powerful post inherited from his predecessor, if only for the sake of continuity and calm markets.
Trump has said he likes Yellen and interviewed her as a candidate. And in the post-crisis decade of easy money, Yellen has shown she will not rush to raise interest rates – something every president should like.