Conservatives campaign against Yellen
President Donald Trump concluded a White House meeting Thursday afternoon with Federal Reserve Chair Janet Yellen as House conservatives mounted a campaign to persuade him not to reappoint her.
Trump met with Yellen as nears completing his search for the next leader of the U.S. central bank when her term ends in February. A White House official confirmed at midafternoon that their meeting had concluded.
Rep. Warren Davidson, R-Ohio, and member of the conservative House Freedom Caucus, is circulating a letter for colleagues on the House Financial Services Committee to sign against Yellen’s reappointment, he said.
“I’m not sure we can make the Fed great again, but we can make it better than it has been,” Davidson said. “Janet Yellen would not be a great successor to Janet Yellen.”
Davidson cited Yellen’s approach to regulatory enforcement as key to his opposition. “The way she’s applied the regulatory framework outside of monetary policy is one of my main concerns,” Davidson said, adding that strict stances on some rules has “led to slower economic growth.”
House Republicans have been among of the biggest critics of the Federal Reserve since the financial crisis, passing several pieces of legislation aimed at constraining the central bank, including requiring it to follow a policy rule and subjecting it to government oversight if there were deviations.
Yellen reached out to lawmakers at the start of her term in 2014, but her relationship with conservatives has remained tense.
The House has no direct power to block the Fed chair, who is nominated by the president and confirmed by the Senate.
Some conservatives also have concerns about Jerome Powell, a member of the Fed board of governors appointed by former President Barack Obama who is also on Trump’s shortlist for chairman.
Trump said at a news conference on Tuesday that he’ll make a decision on Fed chair soon, and that he’s considering among a shortlist of five candidate. They include Stanford University economist John Taylor, former Fed governor Kevin Warsh and his own chief economic adviser, Gary Cohn, in addition to Yellen and Powell.
“Janet Yellen and Jerome Powell both represent a continuation of a failed, status quo monetary policy that puts the interests of the big banks ahead of the American people,” said Andrew Surabian, a former special assistant to Trump who now works closely with the president’s former chief strategist, Steve Bannon. “Americans deserve a true outsider at the Fed and not another insider in the pocket of the financial elites.”
Davidson named Taylor and Warsh as his top choices but said he’d be fine with Cohn or Powell as well.
“The point is that we have an opportunity to do better than Janet Yellen,” he said.
Fed spokeswoman Michelle Smith declined to comment.
Yellen, appointed by Obama, took office in 1014. She has overseen a delicate transition in U.S. monetary policy. She ended quantitative easing, raised the benchmark lending rate off zero, and has now started to unwind the central bank’s $4.5 trillion balance sheet with little impact on the economy or financial markets.
She has not presided over a recession, unlike her three predecessors.