Donald Trump to announce his choice to lead Federal reserve on Thursday

AFP
Washington, United States Published: Oct 31, 2017, 12:06 PM(IST)

Trump boasts 40.9 million Twitter followers and tweets everything from policy announcements to personal attacks to threats against foreign nations Photograph:( AFP )

Story highlights

Trump has said he wanted 'to see rates stay low.'

US President Donald Trump is expected to announce his choice to lead the Federal Reserve on Thursday, a US official said Monday.

Trump said last week he had 'somebody very specific in mind. I think everybody will be very impressed.'

He has not publicly ruled out re-nominating current Fed Chair Janet Yellen to a second four-year term, but US media have reported that Jerome Powell, a current Fed governor, is the likely candidate.

That would mark a change from tradition, as US presidents since the 1970s have always reappointed the central bank chief named by their predecessor as a signal of stability to markets.

But analysts say the decision puts Trump at cross purposes: Yellen has delivered a growing economy with low unemployment and low inflation but her vocal support for tough banking regulations runs counter to the White House position.

Trump has eagerly dismantled signature policies of the Obama administration, making Yellen, an Obama appointee, an enticing target.

Still, while two other known candidates, former Fed governor Kevin Warsh and Stanford Economist John Taylor, have support in some conservative circles, economists say in their hands US monetary policy would now be significantly tighter.

Trump has said he wanted 'to see rates stay low.'

Current White House economic advisor Gary Cohn has also interviewed for the position but Trump may be reluctant to lose Cohn during what could be a hard-fought battle for sweeping tax cuts.

Trump also cooled on Cohn after the economist publicly criticized the president for his response to a deadly white nationalist rally in Charlottesville, Virginia in August.

Powell is the only holdover Republican currently sitting on the Federal Reserve Board and is seen a possible consensus candidate -- amenable to deregulation but unlikely to raise rates as quickly.

Read in App