President Trump
selects Federal Reserve board member Jerome Powell as the next chairman of the nation’s central bank, succeeding Janet Yellen.
WASHINGTON — President Donald Trump on Thursday announced his choice of Federal Reserve board member Jerome Powell to be the next chairman of the nation’s central bank, succeeding Janet Yellen, the first woman to hold the position.
Trump made the announcement in a Rose Garden ceremony with Powell standing next to him. Trump said Powell had earned the “respect and admiration of his colleagues” during his five years on the Fed’s sevenmember board.
Trump also praised Yellen, whom he decided not to nominate for a second term, as a “wonderful woman who has done a terrific job.”
In his remarks, Powell said it had been a privilege to serve under both Yellen and former Fed Chairman Ben Bernanke, saying he shared their sense of mission and dedication and said he would do “everything within my power” to achieve the Fed’s congressionally mandated goals of “stable prices and maximum employment.”
Yellen, in a statement, congratulated Powell on his nomination and said, “I am confident in his deep commitment to carrying out the vital public mission of the Federal Reserve.”
Yellen, who did not attend the announcement, said she would work with him to ensure a smooth transition.
After a search that was more public than any before in the Fed’s more than a century of history, Trump’s choice of the 64-year-old Powell was seen as a safe pick that represents continuity at the Fed.
“Mr. Powell could be considered a clone of Janet Yellen in a positive sense. He will continue the same cautious, gradualist policy in setting interest rates that she did,” said Sung Won Sohn, economics professor at California State University, Channel Islands.
If confirmed by the Sen- ate, Powell would become chairman when Yellen’s term ends on Feb. 3.
Trump had considered re-nominating Yellen for a second four-term term. But in the end, he opted for Powell, a Republican, over Yellen, a Democrat, explaining last week that doing so would allow him to put his own mark on the Fed.
Powell would be the first Fed leader in nearly four decades to lack an advanced degree in economics. He has served on the Fed board since 2012 after a career as an investment manager through which he amassed personal wealth in the tens of millions.
Trump had indicated that his final decision had come down to Powell, Yellen and John Taylor, a Stanford University economist. Earlier, the president had also considered Kevin Warsh, a former member of the Fed board, and Gary Cohn, his chief economic adviser.
Powell will likely be welcomed on Wall Street as someone who has supported the cautious stance toward interest rate hikes that Yellen has pursued in her nearly four years as chair and may be inclined to extend that approach if the economy performs as expected.
At the same time, no one is sure how closely Powell will hew to the Yellen model. He is, for example, thought to be more skeptical than Yellen of the tighter regulations that were enacted after the 2008 financial crisis. And depending on how the economy fares, Powell might lean somewhat more aggressively toward interest rate hikes than Yellen did. How effectively he would lead the Fed’s response to an unexpected economic crisis is unknown as well.