(Bloomberg) -- President Donald Trump said Thursday he would nominate Jerome Powell to be the next Federal Reserve chairman, saying he had won the respect of colleagues at the central bank and members of Congress for his judgment and intelligence.
“Jay will bring extensive private-sector experience and real-world perspective to our government,” Trump said in the White House Rose Garden. “As a result he understands what it takes for our economy to grow, and just as importantly, he understands what truly drives American success.”
In Powell, Trump selected a former private-equity executive who favors continuing gradual interest-rate increases and sympathizes with White House calls to ease financial regulations.
If confirmed by the Senate, the 64-year-old would succeed Fed Chair Janet Yellen, who has raised borrowing costs four times starting in late 2015 and just began scaling back the central bank’s $4.5 trillion balance sheet. While Trump has repeatedly praised Yellen in recent months--calling her “excellent” on Wednesday--he opted against re-nominating her. Yellen’s four-year term ends in February.
“A wonderful woman who’s done a terrific job,” Trump said of Yellen as he introduced Powell.
Trump has said he supports her efforts to keep interest rates low, and his selection of Powell reflects that. Considered a team player, Powell has generally kept any reservations he had about the Fed’s regulatory and monetary actions under Yellen private.
Trump has regularly pointed out that the economy is near full employment and the stock market has reached record highs in recent months. He has shown no inclination that he wants a rapid hike in interest rates.
Powell, who goes by Jay, served at the Treasury Department under President George H.W. Bush. He was then a managing director at Carlyle Group LP before President Barack Obama appointed him to the Fed in 2012.
Powell promised to “do everything within my power” to achieve the dual mandate of the Fed: low unemployment and low inflation.
“Our economy has made substantial progress toward full recovery” since the financial crisis, he said, crediting Yellen and former Fed chairman Ben Bernanke.
Trump interviewed Powell on Sept. 28, and said Friday in an Instagram video that his choice for Fed chair was someone who would impress everybody. The president selected him from a shortlist that included National Economic Council Director Gary Cohn, Stanford University economist John Taylor and former Fed Governor Kevin Warsh.
While he supports keeping interest rates low, Trump has called for rolling back financial regulations, and his advisers have pushed him to select Fed leaders who support that agenda, according to officials familiar with the process.
Trump’s decision not to re-nominate Yellen marks a departure from moves by recent presidents, who have chosen in their first term to maintain continuity by reappointing the sitting Fed chairman. The last president who changed the central bank’s leadership in his first term was Jimmy Carter, who replaced Arthur Burns with G. William Miller in 1978 and then Paul Volcker in 1979.
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