Yellen reportedly out of race to be Fed chair, Trump's choice down to Powell, Taylor

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ISTANBUL
Published 26.10.2017 16:57
Updated 26.10.2017 17:03
A combination photo of three U.S. Federal Reserve Chair contenders: (L to R) John Taylor, Jerome Powell and present chair Janet Yellen in Washington, D.C. (REUTERS Photo)
A combination photo of three U.S. Federal Reserve Chair contenders: (L to R) John Taylor, Jerome Powell and present chair Janet Yellen in Washington, D.C. (REUTERS Photo)

President Donald Trump's search for the next chair of the U.S. Federal Reserve has come down to Fed Governor Jerome Powell and Stanford University economist John Taylor, Politico on Thursday cited one source as saying, while another counseled caution.

Trump has said he was considering both Powell and Taylor, but that he also liked Yellen very much. Politico cited an unnamed source who talks regularly to Trump as saying the only finalists were Powell and Taylor.

Another unnamed senior source Politico described as very close to the process said it was not safe to assume Trump will nominate Powell or Taylor for the top spot at the central bank, saying he "changes his mind about it every day."

This comes after President Donald Trump called Fed chair Janet Yellen "very impressive" on Wednesday, saying he had whittled down his choices to "two or three people."

Yellen, who was named by Barack Obama in 2014, is set to wrap up her term in early April.

"She was in my office a few days ago. She is very impressive. I like her a lot. I would certainly think about it," the U.S. president went on.

"I would like to say you (as president) would like to make your own mark, which is maybe one of the things she has a little bit against her.

"But I think she is terrific. We had a great talk. And we are obviously doing very well together, looking at the markets," Trump stressed, contradicting Politico's report.

For most presidents, giving Yellen another four-year term would be the obvious move: unemployment is falling, inflation is low and, despite whipsawing hurricanes, the economy is growing.

By any measure, Yellen has performed exceedingly well.

Still, betting markets currently expect Trump to pass over Yellen -- making him the first president not to retain the incumbent Fed chair since Jimmy Carter dumped Arthur Burns in favor of G. William Miller while US inflation skyrocketed in 1978.

That would mean changing horses midstream, even though the economy is the one area of smooth sailing for an administration broadly engulfed in turmoil.

She also is a favored target of Republican lawmakers that Trump may need to govern and who believe interest rates should be higher but regulations reduced.

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