President Donald Trump nominated Federal Reserve board member Jerome “Jay” Powell Thursday as the next chairman of the central bank.
Trump made the formal the announcement at a White House ceremony. News that the president had selected Powell leaked out Wednesday night. Powell had been considered the favorite for at least a week.
Selection of the Fed chair has become much more political and public, in part because of the additional regulatory powers the Fed was granted under the Dodd-Frank Act passed in the wake of the financial crisis.
Trump had considered re-nominating Yellen for a second four-term term, which would have been in keeping past practice of giving Fed chairs a second term upon the completion of a first. This was complicated by Trump’s attacks on Yellen on the campaign trail, which led many supporters to expect a change at the top of the central bank. What’s more, Trump expressed a desire to make his own mark on the Fed, rather than reappoint Obama’s pick.
In the nomination of Powell marks a departure from several decades in which the Fed’s chair had an advanced degree in economics. Although Powell has served on the Fed board since 2012 and was a Wall Street investment manager in the private sector, he is a lawyer by training.
Powell, however, may be uniquely prepared for the Fed’s new regulatory roles. Beyond his Wall Street experience, Powell was also an undersecretary of Treasury supervising financial institutions. Powell has indicated that he would like to pare back some of the more aggressive new regulations imposed by the Fed on banks and other financial institutions.
Trump’s final short list of candidates final decision had come down to Powell, Yellen and John Taylor, a respected authority on monetary policy and Stanford University economist. Former Fed board member Kevin Warsh and White House economic adviser Gary Cohn were also considered top candidates until recently.