Who’s next to head the Federal Reserve?
It looks like the job posting to become one of the world’s most influential economists is still open.
There had been talk that President Donald Trump was considering his top economic adviser, Gary Cohn, for the position. But Cohn made the mistake, according to the Wall Street Journal, of criticizing Trump’s response to the violent clashes at a white supremacist rally in August in Charlottesville, Virginia.
“I think there is blame on both sides,” Trump said at a news conference last month, essentially making a moral equivalence between neo-Nazi groups and counterprotesters.
“Taking Gary Cohn out of the running — he is someone who is respected enormously in the markets — is at least a little bit unsettling,” said Chris Low, chief economist of FTN Financial.
But the president still has a long list of names for the position, including current Fed Chair Janet Yellen.
New presidents typically re-nominate the sitting chair for the sake of stability and minimizing political influence over the Fed. Low said that changing chairs in the middle of a tightening cycle (a period of rising interest rates) brings uncertainty inside and outside of the Fed.
It’s anyone’s guess what Trump will do. He has an opportunity to shape the Fed — last week, Vice Chair Stanley Fischer announced he was stepping down, making the fourth upcoming vacancy on the Fed’s seven-member board of governors. These positions will not only determine monetary policy, but an array of bank regulatory policy.
| Janet Yellen’s job explained in five questions |
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