Trump keeps choice for Federal Reserve Chair under wraps before announcement

Global Business

FILE – In this Wednesday, March 15, 2017, file photo, Federal Reserve Chair Janet Yellen speaks during a news conference in Washington. President Donald Trump said Tuesday, Oct. 17, 2017, that he is likely to make his selection for the next Federal Reserve chairman from five candidates, a group that includes current Chair Janet Yellen. (AP Photo/Susan Walsh, File)

President Trump said people will be “very impressed” with his nominee for chair of the Federal Reserve. He said he’ll make the announcement Thursday. There are a number of names being mentioned, but one reportedly is a favorite.

CGTN’s Daniel Ryntjes has more.

Normally a Fed Chair who’s completed one term at the helm of America’s central bank is expected to be re-nominated by the President.

On the presidential campaign trail, Donald Trump slammed Janet Yellen’s job performance, but recently, he’s been full of praise.

“I think Janet Yellen is excellent,” Trump said Wednesday. But when asked if she was his choice, he said, “I didn’t say that.”

But of course, Yellen was appointed by a Democrat, former President Barack Obama.

Many people predict Jerome Powell will be chosen. He’s been a Fed governor since 2012 and crucially, he’s a Republican.

“He’s likely to not rock the boat very much,” said, George Selgin, a senior fellow at the Cato Institute.

Stanford University economist John Taylor is also considered a front-runner, but one who would likely ‘rock the boat’, perhaps by raising interest rates faster, and by dismantling some of the unconventional monetary policies established in response to the last financial crisis.

A former Fed governor, Kevin Warsh is seen as the biggest risk because he’s been a consistent critic of Yellen’s low-rate stimulus policies.

Trump’s current chief economic advisor, Gary Cohn, is widely seen as being out-of-favor with Trump and he’s a businessman not an economist by trade.

Professor Sumit Agarwal from Georgetown University’s McDonough School of Business said the next Fed chair will need to respond to proposed changes to tax and spending policies under Trump.

Depending on political machinations in Congress, the final results could either disappoint and potentially deflate the markets, or if enacted, pump things up even further.

“Can we see a bigger economic growth like what we see in the last quarter of three percent and how will that change the Fed’s stance on inflation monitoring and inflation targeting? Will they then have to clamp down and raise interest rates faster because they are worried about inflation getting out of hand?” asked Agarwal.

But in its latest statement, the Fed points out that inflation remains at a low-level so that, absent surprises, the path of future rate hikes looks to remain gradual.

The President has indicated that he will announce his choice to run America’s central bank on Thursday before beginning his Asia trip on Friday.

Gordon Grey discusses the future of the Federal Reserve under a new chair

CGTN’s Susan Roberts spoke with Gordon Gray, the director of Fiscal Policy at the American Action Forum, about the future of the Federal reserve