In September, the president announced that he’d had meetings with four potential candidates for the head of the Fed, and said that he would decide within two to three weeks. Then, last week, Trump told Lou Dobbs that he had narrowed it down to two or three people and would be announcing his decision “over the next very short period of time.” He went on to banter back and forth with Dobbs, asking whether or not the television host had a preference for top Fed slot. (Dobbs said he’d pick Yellen.) Then on Friday, Trump released a trailer of sorts, promoting his upcoming announcement of the appointment, in which he said that his pick was a person who “hopefully will do a fantastic job.” That’s a lot of hype surrounding the appointment of a person that only 24 percent of Americans can correctly identify, according to a 2014 survey done eight months after Yellen’s appointment.
So who are the finalists?
The consensus among Fed watchers is that Trump’s pick will be Jerome Powell, who has been a governor on the Fed’s board since 2012. Powell, a Republican who served in the Treasury Department during the George H.W. Bush administration, is considered a choice that people on both sides can feel good about. For Democrats who want a Yellen reappointment, Powell is a decent alternative given that he has shown support for many Yellen-issued decisions when it comes to policy, including the choice to maintain low rates through small and not-that-frequent rate hikes. But Powell’s ideology may diverge from Yellen on a key issue for Republicans: the stringency of financial regulations. Yellen has largely maintained support for the regulations put in place after the crisis, saying that they have made the economy stronger and cautioning that any changes should be “modest.” Powell, for his part, has seemed a bit more skeptical when it comes to those regulations, noting that some are perhaps too onerous and need to be pared back.
Then there’s the dark horse candidate (and liberal preference), Fed Chair Janet Yellen. Yellen was pointed by Obama and her four-year term expires in February of 2018, but she is still eligible to serve another term. Before the election, that idea would have seemed ludicrous. Trump spent much of his campaign deriding the choices of the Fed under her tenure, saying that her policies of low rates were creating a false boom in the stock market that could ultimately hurt the economy. Democratic supporters, however, credit Yellen’s slow and steady approach to rate hikes with the receding unemployment rate and continued economic recovery. But since he took office, he’s seemed to change his stance. Trump invited to Yellen to the White House, as a candidate for the job. As recently as October, Trump told Lou Dobbs, in that same interview, that he was still considering Yellen for the position, saying, “I think she’s terrific. We had a great talk. And we’re obviously doing very well together, you look at the markets.”