Inside the Fed chair decision
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President Donald Trump during a news conference with Greek Prime Minister Alexis Tsipras. Photo: Pablo Martinez Monsivais / AP
Like every major Trump decision, the president is leaving even his closest advisers in suspense over his plans for the next Federal Reserve Chairman. Most aides I've spoken to think Trump will appoint Fed Board member Jerome Powell. But nobody who's spoken to Trump feels overly confident.
"It's never a done deal with this guy," said one official.
Rupert Murdoch, who speaks regularly to Trump by telephone and is one of his most influential informal advisers, has urged the president to appoint either of the two free market conservative finalists, Stanford economist John Taylor or former Fed Governor Kevin Warsh, according to two sources familiar with his outreach.
A spokesman for Murdoch declined to comment.
Trump didn't have amazing chemistry with Taylor, according to two sources familiar with their interactions. But he's still in the mix, possibly for vice chair. Top officials who Trump respects, including Vice President Pence, have been vouching for Taylor's credentials and intellect. Trump has also spoken favorably of current Fed Chair Janet Yellen, further muddling the picture.
What else we're hearing:
- A source who spoke to Trump late last week said they left the conversation believing the president had not made up his mind.
- Another source close to the process told me the smart money is still on Powell. Powell's most aggressive advocate has been Treasury Secretary Steven Mnuchin. But Trump should be taken at his word when he tells Fox Business' Maria Bartiromo that he's considering Taylor and Yellen, or a combination of Powell and Taylor for chair and vice-chair.
- Some White House officials have vented about the constant stream of news stories promoting Powell's candidacy. They say they suspect the leaks have come from Treasury, since Powell is Mnuchin's preferred candidate.
- One senior official said Powell is far from a home run for Republicans. When Obama nominated Powell to the Fed Board, in 2012, 21 Republican senators voted against his confirmation.
What the West Wing is reading: Senior administration officials told me that Friday's Wall Street Journal editorial headlined "A Fed for a Growth Economy" was read attentively in the West Wing. The editorial argues it's a bad idea to give another term to the Obama appointee Janet Yellen or replace her with Jerome Powell, whom the Journal portrays as a Yellen clone. The newspaper lobbies for Trump to appoint either Taylor or Warsh. "Both would be change agents at the Fed," the editorial declares.
Bottom line: If you're handicapping the Fed Chair race, you're still probably safest with Powell. But this is far from a done deal. Trump still plans to announce his pick for the Fed Chair before he leaves for Asia on Nov. 3.
