Trump’s chance to reshape the Federal Reserve could be his biggest economic legacy

Because of a wave of vacancies, Trump will have the ability in the coming months to appoint as many as four people to seats on the seven-member Federal Reserve board, including the top two positions.

WASHINGTON — President Donald Trump is betting he can turbocharge the U.S. economy with tax cuts and trade deals, but his greatest leverage to influence growth may rest with an unparalleled opportunity to reshape the world’s most powerful central bank.

Because of a wave of vacancies, Trump will have the ability in the coming months to appoint as many as four people to seats on the seven-member Federal Reserve board, including the top two positions. That’s in addition to his first Fed nominee, investment-fund manager Randal Quarles, who is awaiting Senate confirmation.

With its power to move interest rates, regulate financial institutions and provide emergency lending, the Fed plays a pivotal role in stimulating the economy, encouraging job growth, controlling inflation and recovering from recessions. At the same time, a misstep or rash decision by the Fed has sometimes been blamed for a downturn.

Today the Fed is stewarding the economy at a time of unusual uncertainty as central bank officials try to gently unwind the dramatic steps they took after the Great Recession, without ending a long, but slow, economic expansion that some say is already overdue for a reversal.

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“The amount of turnover, the number of vacant seats, I think this is historically unprecedented — certainly in my lifetime,” said Princeton economist Alan Blinder, 71, who was the Fed’s vice chairman from 1994 to 1996.

A lot is riding on who will be the next Fed chair. Janet Yellen, a former University of California at Berkeley economics professor, became the first woman to lead the bank in its century-old history. Her four-year term expires in February, and it’s not known if Trump will renominate her. The decision has been complicated by an apparent falling-out between Trump and his top economic adviser, Gary Cohn, who had been seen as Yellen’s likely replacement.

Typical of his administration, Trump is approaching the decision differently than other recent presidents. In a nod to market stability and confidence, recent presidents have kept Fed leaders in place, even if appointed by the rival political party. And they’ve telegraphed their decision much earlier.

Trump, by…

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