FEDERAL RESERVE/NOMINATIONS/TRUMP AS PRESIDENT: “The two men that President Trump is considering as replacements for Chairwoman Janet L. Yellen of the Federal Reserve have sharply different views on monetary policy, offering a stark test of Mr. Trump’s economic priorities.
The choice pits a status quo candidate, a current Fed governor, Jerome H. Powell, against a Stanford University economics professor, John B. Taylor, who is celebrated by many conservative Republicans for his insistence that the economy would produce stronger growth if the Fed would just get out of the way.
Mr. Trump said last week that he also might nominate Ms. Yellen, whom he said he liked ‘a lot,’ to a second term. He said Monday [10-23-17] that a decision is ‘very, very close.’
Picking Mr. Powell could allow Mr. Trump to install a Republican Fed chairman without significantly altering monetary policy. Mr. Trump prizes the fact that the economy is growing and the unemployment rate has fallen to 4.2 percent.
The Fed’s current path includes a gradual increase in the benchmark interest rate, which it slashed to nearly zero in the wake of the 2008 financial crisis. The Fed has raised rates four times since then and is expected to approve another increase before the end of the year. It has also begun slowly reducing its $4.2 trillion portfolio of United States Treasury debt and mortgage-backed securities that it purchased during the crisis to help lower borrowing costs.”
-Binyamin Appelbaum, “Trump’s Fed Finalists Offer a Clear Choice: Status Quo or Significant Change,” The New York Times online, Oct. 24, 2017