Press Release (ePRNews.com) - BROOKINGS, Ore. - Jun 30, 2017 - President Trump’s chief economic advisor, Gary Cohn, gives praise for the work of Federal Reserve Chairman Janet Yellen, but refuses to confirm her renomination when her term ends in February, 2018. She will be a lame duck this summer if John Taylor and Kevin Warsh are announced as replacements for Yellen and Vice Chairman Stanley Fischer.
It appears the Trump administration plan to go in a new direction with a more rules driven Federal Reserve, operating more under the control of Congress. Yellen and Fischer believe the Fed should be independent of Congress. However, Vice President Mike Pence, and Speaker Paul Ryan believe the Constitution gives Congress the power to coin money and regulate its value. It is rumored Randal Quarles will be nominated to replace Daniel Tarullo as the Fed’s point man on financial regulation. If confirmed by Senate, Quarles would become vice chair of financial supervision and regulation. Treasury Secretary Steve Mnuchin believes the Dodd-Frank financial law places too much bureaucratic burden on small regional banks.
There are two seats on the Fed’s seven-member Board of Governors vacant and Daniel Tarullo announced he will leave on or about April, 2018. This will give President Trump the opportunity to nominate three new members. The Trump administration has interviewed David Nason, Marvin Goodfriend and Quarles to fill board vacancies. In addition President Trump could replace board members Yellen and Fischer if they are not renominated and resign. This would give President Trump five vacancies to fill on the seven member board, and a chance to change the direction of the Fed. Unfortunately the Taylor rule, named after John Taylor, is based upon neo-Keynesianism, and President Trump’s candidates look a lot like the crew who bailed out Wall Street during President Bush’s administration.
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Dr. Steve Johnston, author.com