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Next Fed Chair: Yellen, Cohn, or other

The Wall Street Journal is reporting that President Trump is considering renominating Janet Yellen as Fed Chair but also views his economic adviser Gary Cohn as a top candidate. The president has changed his tune since the election season when he criticized Yellen repeatedly. Now he says that he thinks she is doing a good job and has "a lot of respect for her." Cohn would represent a dramatic shift away from an academic led Fed to a savvy business leader in Cohn who had a 26 year career at Goldman Sachs.

President Trump said this about Cohn:

“I’ve known Gary for a long time, but I’ve gained great respect for Gary working with him, so Gary certainly would be in the mix.”

As for Yellen, this stood out:

“I’d like to see rates stay low. She’s historically been a low-interest-rate person.”

This makes sense because the new administration wants to increase infrastructure spending and the military budget so low interest rates would help their cause.

Apparently there are “two or three” other contenders in the mix, but the president declined to name them and said he probably wouldn’t announce a nominee until the end of the year. “It’s early to make the decision,” he said, noting Ms. Yellen’s term doesn’t expire until February. He said he expected the confirmation process for the Fed job would move quickly.

Either choice would likely be fine for financial markets. Cohn would be more of a wild card but given his Goldman ties, it would likely be viewed as extremely positive for Wall Street. Stay tuned...

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About the Author: Chris Wang

Chris Wang

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