White House considering at least six candidates for Fed chair: Resources

The White House is considering at least a half-dozen candidates to be the next head of the U.S. Federal Reserve, including economists, economists with banking experience along with other business people, according to three people knowledgeable about the matter.

The breadth of the research goes contrary to the story that has taken hold in Washington and on Wall Street that the Fed chair nomination is a two-horse race involving National Economic Council Director Gary Cohn and present Fed chair Janet Yellen, whose term expires in February.

Some of the other potential contenders include former Fed Governor Kevin Warsh, Columbia University economist Glenn Hubbard and Stanford University professor John Taylor, one of those people familiar said. Lawrence Lindsey, a former financial advisor to president George W. Bush, was discussed. Former U.S. Bancorp chief executive Richard Davis and John Allison, the former CEO of BBamp;T Corp., have also been considered.

President Donald Trump said in July that both Ms. Yellen and Mr. Cohn, a former Goldman Sachs Group Inc. president, were being considered for the best Fed job. Since that time, Mr. Cohn’s prospects have grown cloudy after he publicly criticized remarks the President made in the aftermath of racially-charged violence in Charlottesville, Va.. The Wall Street Journal reported on Wednesday that Mr. Trump is not likely to select Mr. Cohn for the article, and three people close to Mr. Trump told Bloomberg that Mr. Cohn’s prospects for the Fed job have dimmed.

But three people knowledgeable about the process say Mr. Trump isn’t yet deeply concentrated on the search. It’s still being conducted by employees that aren’t ready yet to present him with a short-list of vetted candidates. John DeStefano, the president’s chief personnel recruiter, is responsible for the search, one person said.

Mr. Trump’s former chief strategist Steve Bannon, who clashed with the more moderate Mr. Cohn within the White House prior to his death last month, told 60 Minutes in an interview to be broadcast Sunday that Mr. Cohn should “absolutely” resign.

Having credible leaders on peak of the central bank is vital for financial market stability. For now, investors are demonstrating patience, trusting in Ms. Yellen’s leadership while they await the president to create a choice. Mr. Trump said in July that he would likely not pick until the end of the year.

He has a opportunity to fill four of the seven Fed governor chairs. Vice-chairman Stanley Fischer said Wednesday he will resign from his position next month, a surprise announcement made with nine months remaining on his sentence.

“It has been glacial in filling a number of those tasks, which is surprising since the president during the transition” spoke a lot about “retaking control” of the central bank, said Jaret Seiberg, a Washington policy analyst for Cowen amp; Co. in an interview with Bloomberg Television.

Randal Quarles, a Treasury officials during the George W. Bush administration, was approved by the Senate Banking Committee on Thursday to fill one of these openings, even though his pick still needs confirmation from the full Senate. Carnegie Mellon University professor Marvin Goodfriend, a widely respected monetary economist, has been considered for a governor nomination, according to people knowledgeable about the matter.

Despite Mr. Quarles and Mr. Goodfriend set up, the White House could have three Fed vacancies: another governor, a vice-chairman, along with a new chairman if Mr. Trump decides not to renominate Ms. Yellen. She has said that she’ll serve her out term and has declined to comment on whether she would like to remain in the job.

The nominations of Mr. Quarles and Mr. Goodfriend demonstrate that the White House is also trying for diversity of professional expertise, skills and geographic representation on the Fed Board, as required by legislation. 1 member of the board must also have experience working in or supervising community banks.

Courtesy: The Globe And Mail

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