The president of the Federal Reserve (Fed), Jerome Powell You can rest easy after the statements of the president-elect of the United States, Donald Trump. In an interview on NBC News’ Meet the Press, Trump stated that has no intention of seeking a replacement for Powell before his term ends in May 2026. Asked about the subject, he responded: “No, I don’t think so. I don’t see it.” He further added, “I think if I asked him, he would do it. But if I asked him, he probably wouldn’t do it.”
Powell, for his part, had already made it clear that I would not leave office early, noting that he did not believe Trump had the legal authority to remove him, as this is “not permitted by law.” These statements by the president-elect seem dispel one of the biggest uncertainties in the market, especially after Trump hinted during the campaign that the president should have more influence over the central bank’s interest rate decisions.
In October, during an interview with Bloomberg News at the Economic Club of Chicago, Trump expressed his view that while he shouldn’t be able to order decisions on interest rates, he does have the right to comment on whether they should go up or down. On that same occasion, he openly criticized Powell’s work, saying: “You show up to the office once a month and say, ‘Let’s flip a coin,’ and everyone talks about you like you’re a god.”
It should be remembered that Trump was the one who appointed Powell in February 2018 as president of the Board of Governors of the Federal Reserve System, despite having had public differences with it over interest rate policies. Later, in 2022, the president Joe Biden confirmed Powell for a second four-year term at the head of the Fed.
Trump’s possible candidates for the Fed
There are a half-dozen names floating around Wall Street, Washington and Chicago; among them, Judy Shelton, Christopher Waller, Larry Kudlow, Kevin Warsh, John Williams and Randal Quarles. Who is who?
Judy Sheltonis a controversial economist and former Trump adviser, known for her unorthodox stances and support for a partial return to the gold standard. She had already been nominated by Trump for a position at the Fed in 2020 but her confirmation fell through. While Christopher Waller who today sits on the Fed Board of Governors, is respected in financial circles and could be a more consensual option, although he shares some favorable opinions on growth. Q
for his part, Larry Kudlowa longtime Trump economic adviser and Fox Business host, is a strong advocate of pro-growth and deregulation policies, and his style fits well with the Republican’s economic approach, but he has no experience at the Fed.
As to Kevin Warsha former Fed governor and influential figure among economic conservatives, had already been proposed for the position in 2017, and could offer a more rigorous and orthodox approach, while being in line with certain pro-growth policies.
While John Williamsalthough president of the New York Fed, is generally neutral, but could also be an acceptable choice for a Trump administration due to his strong monetary policy experience. He is considered moderate and pragmatic, which could fit with an approach focused on economic stability.
But also in the dance of names and candidates it usually appears Randal Quarlesformer vice president of supervision at the Fed, who would be the closest to Trump’s approach. Quarles He was appointed by Trump and is known for his favorable vision of more flexible banking regulation, in line with the deregulation policy that the Republican has supported.is also respected in financial circles and is considered to have a more accommodative stance towards the markets.
There is another name that circulated, that of an influential economist with very good knowledge of markets and the global economy, and highly respected in the international financial world, it is Mohamed El-Erianthe former PIMCO, today Allianz. He is the least likely candidate but could be an unexpected but pragmatic choice for Trump.
“These names represent a variety of views of Trump, ranging from the traditional approach to more unorthodox ones. Obviously, it is too early to say,” says Plassard, who acknowledges that today there are doubts about whether Trump really wants to fire Powell. “The consequences would be dramatic for investor confidence and, of course, for financial markets. However, we can imagine that if interest rates did not move in the “right” direction, Trump’s anger could increase,” he warns.
Source: Ambito
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