President Trump, who has several spots to fill at the Federal Reserve, is expected to nominate its next chairman this coming week but is unlikely to simultaneously tap a vice chairman at the same time, Treasury Secretary Steven Mnuchin said on Saturday, reports The New York Times.
“I think for the moment we’re
focused on the Fed chair decision. That’s really the focus at the moment,” Mnuchin said when speaking to reporters aboard a military aircraft during a weeklong Middle East trip.
There had been some speculation that Trump might name Jerome Powell as Fed chairman and simultaneously name John Taylor as Fed vice-chairman. To "balance" the Fed. Taylor is viewed as much more of an interest rate hawk.
Easy money Powell appears to be the frontrunner. However, as I pointed out in Friday's EPJ Daily Alert, during a speech at the University of Wisconsin in Madison on Thursday, Taylor was singing high praises for Trump's economic policy agenda.
If Trump thinks he can muscle Taylor to keep interest rates low, the way President Nixon muscled Arthur Burns, Trump may pick Taylor.
From Burton Abrams in The Journal of Economic Perspectives—Volume 20, Number 4—Fall 2006:
Although Arthur Burns was an eminent economist, Nixon was probably more impressed that he was a sympathetic Republican loyalist[...]Evidence from the Nixon tapes,recently made available to researchers, clearly reveals that President Nixon pressured Burns, both directly and indirectly through Office of Management and Budget Director George Shultz, to engage in expansionary monetary policies prior to the 1972 election[...]-RW
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