As the din on the fourth interest rate hike in the current normalization cycle settles down, the focus shifts to whether the Federal Reserve will have a change of guard at the helm when the incumbent Janet Yellen completes her term on February 3, 2018.
Keen On Serving Out The Full Term
At the post-meeting press conference Wednesday, Yellen reiterated her earlier assertion that she intends to serve out her full term. This has served to dispel rumors that she may be relinquishing office mid-way through. Following Ben Bernanke's tenure as the Fed chair, Yellen was nominated to the post by former President Barack Obama.
Partisanship Coloring Trump's Stance
During his campaign trail, Trump had said in an interview to the CNBC that he would fire Yellen simply because she is not a Republican. This is despite he in agreement with the ultra-loose monetary policy the Fed under Yellen was pursuing.
That said, on assumption of office, things have remained cordial, although the individuals in question were not on the same page on all the issues. When Trump was looking to limit the powers of the Federal Reserve by allowing a government audit of the Fed, Yellen has been very vocal in preserving the independence of the central bank.
However, there seems to be a shift in stance now.
Signals Still Conflicting
Trump's disposition toward Yellen seems to have changed, as he suggested in a Wall Street Journal interview in mid-April that he is open to appointing Yellen for a second year term.
However, another Wall Street Journal report, citing a senior White House official, said the president would launch a search for the coveted position of the central bank chief, spearheaded by Gary Cohn, the president's chief economic advisor.
Yellen The Frontrunner –Bloomberg Poll
Meanwhile, Yellen is likely to win a second term at office, according to a Bloomberg poll of Fed watchers.
The poll conducted between June 5 and June 8 puts Yellen ahead of the pack of likely contenders for the post. However, the score was less than a third of the maximum possible, Bloomberg said. Others who have a decent chance after Yellen include Federal Reserve Gov. Kevin Walsh; Stanford University professor, John Taylor; Columbia University professor, Glenn Hubbard, and Cohn, himself.
Despite the lead Yellen has gained in the polls, it is only slender for anyone's liking, and the Bloomberg report further suggested her re-nomination is possible, and not possible.
Though Yellen's term completion is a long way from now and nothing is certain in this political climate, the topic is unlikely to become too muted in the intervening period, given the clout the position has in shepherding the economy.
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How Fed Governor Tarullo Stepping Down Changes The Balance Of Hawks And Doves On The FOMC ________ Image Credit: By Federalreserve - BKLM4457, Public Domain, via Wikimedia Commons
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