Powell as next Fed chair?

Trump to announce Powell as next Fed chair today

He is widely viewed as a safe pick, though he was not the first choice of conservatives on Capitol Hill and inside the administration.

By BEN WHITE and VICTORIA GUIDA

President Donald Trump will announce his intention to nominate Jerome “Jay” Powell as the next chair of the Federal Reserve at 3 p.m. on Thursday, two administration officials said.

Plans are under way to introduce Powell as the nominee to succeed Janet Yellen, whose first term expires in February, the administration officials said.

Powell, who first joined the central bank's board of governors in 2012 under President Barack Obama and then was renominated in 2014, is not expected to deviate heavily from Yellen’s gradual approach to raising interest rates.

He is widely viewed as a safe pick, though he was not the first choice of conservatives on Capitol Hill and inside the administration, who argued in favor of other candidates including former Fed Gov. Kevin Warsh and Stanford economist John Taylor.

Powell, the top choice of Treasury Secretary Steven Mnuchin, has been leading the pack of finalists for nearly two weeks, as first reported by POLITICO.

Officials from the Treasury Department and elsewhere in the administration argued against Taylor as potentially too likely to hike rates, diminishing the impact of a tax overhaul as a result. They also argued he might not be the strongest hand during a potential future financial crisis.

Powell received a handful of “no” votes from Republicans during his initial confirmation to the Fed. But Capitol Hill Republicans say if nominated he would likely win fairly easy confirmation to succeed Yellen, who became the first woman to lead the central bank in 2014.

Trump criticized Yellen sharply during the 2016 campaign but later warmed to her and included her among the final candidates for the Fed. But people close to the president say he is eager to leave his own mark on the Fed with a new chair. And Trump has shown a consistent desire to move on from policies and personnel left over from Obama.

National Economic Council Director Gary Cohn was initially a leading candidate for the Fed job. But his relations with Trump soured after Cohn criticized the president’s response to racially charged protests in Charlottesville. Trump lately has told people that he wants Cohn to stay focused on the tax reform efforts.

Trump's choice will end months of reality-show-style speculation about who will lead the central bank over the coming years.

The occupant of the office will be critical to the economy as the Fed tries to return to a more normal footing after a decade of emergency policies following the financial crisis and Great Recession. In selecting Powell, Trump would be choosing a candidate likely to mostly back the administration’s attempts to lighten some post-crisis regulations of the financial industry while not responding to the impact of potentially large tax cuts with rapid rate hikes to ward off inflation.

Powell is a Republican who worked in George H.W. Bush's Treasury Department, and has a background in investment banking and private equity.

Unlike Yellen, he was trained as a lawyer rather than an economist, though he has worked in the financial world for most of his career.