Jerome Powell Expected to Be Trump’s Pick for Fed Chair

Jerome Powell, governor of the Board of Governors of the Federal Reserve, arrives for a dinner during the Jackson Hole Economic Policy Symposium in Grand Teton National Park near Jackson, Wyo., on Aug. 21, 2014. (AP Photo/John Locher, File)

WASHINGTON (CN) – President Donald Trump on Thursday is expected to name Jerome Powell, a former investment banker and Federal Reserve governor, as his choice to replace Janet Yellen, whose term as Fed chair ends in February.

Trump teased the decision in an Instagram post last week, claiming the nation is anxiously awaiting his announcement and that people will be “very impressed” with the nominee.

If Powell is the president’s choice, he would be the first fed chair without an economics degree in 40 years.

Trump has been considering Powell, Yellen and John Taylor, a Stanford economist, for months.

Declining to give Yellen a second term, Trump is breaking with recent presidential  tradition.

But the choice of Powell, who has served at the Fed since 2012, would not be a departure in philosophy.

Powell is known as a centrist when it comes to monetary policy and he has been a strong supporter of what many see as Yellen’s cautious approach to interest rate hikes.

He also strongly supported Yellen’s decision to gradually reduce the central banks $4.5 trillion asset holdings, a slow sell-off than began earlier this month.

Also in step with Yellen, Powell supports the regulatory policies laid out in the Dodd-Frank Wall Street Reform and Consumer Protection Act, but is resistant to parts of the law that bar banks from making riskier bets on the market.

During an Oct. 5, speech at the Federal Reserve Bank of New York, Powell offered this perspective on banking regulation:

“There is certainly a role for regulation, but regulation should always take into account the impact that it has on markets – a balance that must be constantly weighed,” he said. “More regulation is not the best answer to every problem.”

Powell, a Republican, studied law at Georgetown University and was editor-in-chief for the Georgetown Law Journal.

He served as undersecretary for the U.S. Treasury Department under former President George H.W. Bush before becoming partner at private equity firm, The Carlyle Group. In 2012, then-President Barack Obama nominated him to the federal reserve’s board of governors.

The White House is expected to announce Powell’s appointment on Thursday before Trump leaves Washington for a 12 day visit to Asia where he will meet with China’s president Xi Jinping to discuss trade and North Korea.

The Federal Reserve is not  directly controlled by the White House, but the selection process for the new chair has been led by four Trump administration officials: Johnny DeStefano, director of presidential personnel, Andrew Olmem, special assistant to the president for financial policy; Jeremy Katz, deputy director of the National Economic Council and U.S. Treasury Secretary Steve Mnuchin.

Shai Akabas, director of economic policy at the Bipartisan Policy Center threw his support behind Powell, saying the federal governor is not only well versed on topics from monetary to regulatory policy but is someone “who knows how to gather input, build consensus and lead.”

During Powell’s time at the center, Akabas said Powell was best known as a “straight shooter.”

“Jay’s law degree is a useful tool, particularly when it comes to considering bank regulatory policy. His diverse experiences and thirst for knowledge showed in his rigorous and disciplined approach to every element of his work,” Akabas said.

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