In Less Than a Year, The Federal Reserve Could Look Dramatically Different

Thursday, 14 September 2017, 03:51:32 AM. With the opportunity to fill more than half of the board’s seats, President Trump could substantially alter the course of monetary policy.
There are seven seats on the Federal Reserve’s Board of Governors—the group of people who make the most consequential decisions about American monetary policy—and President Donald Trump will have the opportunity to fill an unusually large number of them. One seat opened soon after he took office, when the former comptroller of the currency, Thomas Curry, stepped down. Then Governor Daniel Tarullo resigned in February. Between one more announced resignation since then and another standard term expiration, at least two more spots will have opened up by February of next year. If and when Trump’s nominees assume their new roles, they could drastically change the Fed’s monetary policy and oversight of banks. The most notable vacancy will come when current Fed Chair Janet Yellen’s term expires in February 2018. It wouldn’t be unheard of for a president to reappoint a Fed chief installed by his predecessor, and Trump, who criticized Yellen during the campaign, has softened his tone after taking office, saying that he respects Yellen and would consider keeping her on. That remains a possibility, as a recently released schedule of Yellen’s shows that she met with Trump’s daughter Ivanka over the summer. Still, it would not be a surprise if Trump, as he has already done in several other realms, unwinds a decision made by Obama and appoints someone else to the position. If Yellen gets replaced, who might take her spot? For some time, many guessed Gary Cohn, the president’s senior...Read more
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