President Donald Trump on Thursday officially nominated Jerome Powell to replace Janet Yellen as chair of the Federal Reserve.
“If we are to sustain all of this tremendous economic growth, our economy requires sound economic policy and prudent oversight of our banking system,” Trump told reporters in the Rose Garden Thursday afternoon. “I have nominated Jay to be our next Federal chairman, and it’s so important, because he will provide exactly that kind of leadership. He’s strong, he’s committed, he’s smart.”
Powell, a Republican investment banker whom Barack Obama appointed as a Fed governor in 2012, is expected largely to stay the course set by Yellen, whose leadership has been credited for helping to reduce unemployment, curb inflation, and inspire stock market confidence. But he is also likely to be more sympathetic toward President Trump’s agenda of economic deregulation than his predecessor. Powell has described that agenda as “a mixed bag.”
Powell has said publicly that he supports efforts to strengthen regulation since the stock market crashed in 2008, but that some of those regulations could be improved to help the economy.
“The whole idea is to preserve the significant core reforms that were made but to go back and clean up our work,” Powell told the Senate Committee on Banking, Housing, and Urban Affairs in June.
But Powell’s middle-of-the-road tendencies have also made it difficult for the White House to justify breaking from precedent to pick him over Yellen. Incoming presidents have historically reconfirmed their predecessor’s pick; Yellen will become the first Fed chair in nearly 40 years to serve only a single four-year term in the position. Senior White House officials offered reporters only general platitudes about Powell’s success in the private sector to explain the change.
“Between Janet Yellen and Jay Powell, if you look at their careers, there’s a lot of things that I think Governor Powell has, a pretty unique set of prior experiences,” a senior official said Thursday afternoon. “I think Governor Powell has been very effective and very successful in his career before moving to the Fed in the private sector. There’s a difference; I’m not saying the president thinks one is better.”
On the campaign trail, Trump condemned Yellen’s decision-making at the Fed, charging in his first debate with Hillary Clinton that the stock market was in “a big, fat, ugly bubble” due to Yellen keeping interest rates low, which he said was done as a favor to Barack Obama and Democrats. Recently, however, Trump has been kinder to Yellen, repeatedly praising her and her work as “excellent.”
“The president sincerely and thoughtfully considered several candidates during this process, including Chair Yellen herself, who was a real contender up until the very end,” a senior official told THE WEEKLY STANDARD. “He may have taken issue with some of her decisions in the past, but as you have seen recently, he has great respect for her and her time as chair.”
