Trump to Meet With Yellen to Discuss Fed Chief Renomination -- 2nd Update
16 October 2017 - 09:30PM
Dow Jones News
By Peter Nicholas and Kate Davidson
WASHINGTON -- President Donald Trump plans to meet Thursday with
Federal Reserve Chairwoman Janet Yellen to discuss the possibility
of nominating her for a second term as central-bank chief,
according to a person familiar with the matter.
Ms. Yellen's four-year term as chairwoman expires in early
February. She is one of several people under consideration for the
Fed job, along with former Fed governor Kevin Warsh, current
governor Jerome Powell, Stanford University economist John Taylor
and National Economic Council Director Gary Cohn.
Mr. Trump met with Mr. Taylor on Wednesday, and interviewed
Messrs. Warsh and Powell late last month.
Politico reported earlier that Mr. Trump would meet with Ms.
Yellen this week to discuss the matter.
Ms. Yellen, who took the helm of the central bank in 2014, has
remained in the running for another term as chairwoman while White
House aides searched for possible successors, some of whom have
openly criticized Fed policy during her tenure.
Mr. Trump told The Wall Street Journal in July he was
considering renominating Ms. Yellen after her current term as
chairwoman expires. She met with White House adviser Ivanka Trump,
the president's daughter, in July and had a 15-minute meeting with
Mr. Trump in February.
"I think she's done a good job," Mr. Trump said in the July
interview. "I'd like to see rates stay low. She's historically been
a low-interest-rate person."
Ms. Yellen has led the Fed's campaign to unwind the easy-money
policies it pursued in the wake of the financial crisis, including
three rounds of bond-buying and an extended period of near-zero
interest rates aimed at stimulating the economy. She oversaw the
Fed's first interest-rate increase in nearly a decade in December
2015.
The Fed this month began shrinking its $4.5 trillion bond
portfolio, and officials have signaled they may raise their
benchmark federal-funds rate again this year from the current range
of 1% to 1.25%.
She has defended the Fed against criticism on Capitol Hill,
largely from Republicans, that the central bank was too slow to
raise rates after the financial crisis and should be subject to
greater congressional oversight.
The president's pick is subject to Senate confirmation, a
process Ms. Yellen went through most recently when she was
confirmed as Fed chairwoman. Though her potential nomination could
face resistance from some Senate Republicans, she likely would win
widespread support from Democrats, who have backed the Fed's plan
for gradual rate increases.
Mr. Trump is still weighing several other candidates for the
job, and White House Chief of Staff John Kelly emphasized last week
that interviews were ongoing.
"All of the people that have been in to interview have been
really first-round draft choices, and we have more to come," he
told reporters Thursday.
The president met Wednesday with Mr. Taylor, who has criticized
the Fed's easy-money policies and pushed for the adoption of a
mathematical formula to guide the Fed's interest-rate decisions. At
a conference Friday, Mr. Taylor renewed his criticism that the Fed
fueled the financial crisis by keeping rates too low. He declined
to comment on his candidacy.
Mr. Trump also met late last month with Mr. Warsh, who served as
a Fed governor from 2006 to 2011, and as a member of Mr. Trump's
Strategic and Policy Forum, a group of business leaders that
disbanded in August. Mr. Warsh also has called for changes to Fed
policy and communications, and warned the Fed's stimulus policies
increased the risks of a financial bubble.
Mr. Powell, a former partner at the private-equity firm Carlyle
Group, has served on the Fed board since 2012 and favored the
Yellen-led approach of gradual interest-rate increases. He also met
with Mr. Trump late last month.
Mr. Cohn's prospects have fluctuated over the past few
months.
In an interview with The Wall Street Journal in July, the
president said he was considering Mr. Cohen for the Fed
chairmanship. But early last month, people familiar with Mr.
Trump's thinking said that he was unlikely to nominate Mr.
Cohn.
The change in fortunes stemmed from Mr. Cohn's public criticism
of the president's response to a violent clash in Charlottesville,
Va., the people familiar with the matter said.
But Mr. Cohn remained in the running. Indeed, the president will
sometimes tease him by mentioning other candidates for the
chairmanship in Mr. Cohn's presence, a White House official
said.
Write to Peter Nicholas at peter.nicholas@wsj.com and Kate
Davidson at kate.davidson@wsj.com
(END) Dow Jones Newswires
October 16, 2017 16:15 ET (20:15 GMT)
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