Last week reports surfaced that Trump was “impressed” by his interview with Dr. John Taylor to fill the role of Fed Chairman. The markets at PredictIt.org, however, aren’t buying it.
As he has for most of October, Jerome Powell, himself a current Fed governor, is seen as a heavy favorite to replace Janet Yellen next year.
While it would change the name on the Eccles Building letterhead, Powell’s nomination would be a full endorsement of the status quo in terms of monetary policy. Ben Bernanke has described Powell as a “moderate and a consensus builder,” in the beltway such qualities tend to be as dangerous as they are dull.
Should Trump follow through with Powell’s nomination, it will be interesting to see if the appointment faces any pressure from Republicans. Nominating Powell over Taylor or Kevin Warsh will dash the hopes held by some influential conservatives that have been pushing for moderate rules-based Fed reform. Also working against Powell is his connection to Barack Obama. As Bloomberg noted this week, 23 Republican Senators voted against Powell last time his name came up for a vote to fill another Fed position in 2014. It will be interesting to see how many flip now that the nomination is coming from a Republican, rather than a Democrat.
