Gary Cohn, a top adviser to President Trump and an alumnus of Goldman Sachs, would be a viable candidate to replace Janet Yellen as chairman of the Federal Reserve, a top official in the central bank system said Monday.
"I think Gary is a reasonable candidate," said Federal Reserve Bank of New York President William Dudley in an interview with the Associated Press. "He knows a lot about financial markets. He knows lots about the financial system."
Dudley, the former chief economist at Goldman Sachs, served under Cohn, who was president of the megabank from 2006 until he joined the Trump administration.
Trump has said that Cohn is being considered to run the Fed. Cohn would be an unusual choice in that he is not an academic economist, unlike recent Fed chairmen.
Dudley, however, said that he does not believe it is necessary to have an economics Ph.D. to run the Fed and that diversity among monetary policymakers is important.
As a permanent member of the Fed's monetary policy committee, Dudley would work with Cohn if he were to be appointed. Dudley's term runs through 2021.
In Monday's comments, Dudley also said the Trump administration has been "hands-off" in terms of the Fed's deliberations about interest rates. "They've been very respectful of the monetary policy, not to politicize the monetary policy process," he said.
On the campaign trail, Trump said Yellen was manipulating monetary policy to favor former President Barack Obama and the Democratic Party, and that she had inflated a bubble in danger of collapsing. Since taking office, however, the president has significantly softened his rhetoric regarding Yellen and has entertained the idea of reappointing her.