Topic of next Fed chair not on program at central bankers’ meeting in Jackson Hole
This year’s gathering of the world’s central bankers had a motif as lofty as the Grand Teton Mountains that loomed over their meeting location — “Fostering a Dynamic Global Economy.”
However, while many hours were dedicated to sitting in a windowless conference room dissecting the symposium’s academic papers about the best way best to bolster lacklustre global expansion, one hot topic wasn’t on the program — that will President Donald Trump nominate to be the next president of the Federal Reserve once present Chair Janet Yellen’s short term term is up next February.
Trump has said he’s considering picking Yellen for another term regardless of the harsh things he said about her during last year’s presidential campaign. But he’s also said Gary Cohn, the head of Trump’s National Economic Council and the guy overseeing the selection process, is in the running as well.
On the record, present Fed officials were very diplomatic about the potential change. Robert Kaplan, president of the Fed’s Dallas regional bank, didn’t want to discuss particular candidates, just saying, “We’re a really resilient organization so I am quite confident about our ability to succeed” whoever is chosen.
Esther George, president of the Kansas City Fed, the sponsor to the seminar, also didn’t need to go over possible candidates for the top job or another vacancies on the seven-member Fed board. “These are important tasks,” she said in an interview on CNBC. “So you need people who understand that complete mission and are ready to roll up their sleeves and come to work.”
Given the discussions beyond the conference area, the bottom line is that nobody here had any idea what Trump could do or if he might do it. Trump said in an interview last month he hopes to wait before the end of the year to create a determination, a deadline which many believed was risky given that whomever Trump picks will need to clear the Senate confirmation process and Yellen’s term as chairman will be up on Feb. 3.
The mystery surrounding Trump’s choice for Fed leader pervaded not only the hallway discussions but also the analysis of the addresses in the conference.
As is customary, Yellen, as the recent Fed chair, was the lead-off speaker on Friday morning. She devoted her remarks into a vigorous defence of the financial regulatory overhaul a Democratic Congress and Barak Obama, a Democratic president, put in place in the aftermath of the 2008 financial catastrophe. She said the changes had made the financial system more resilient and she rejected arguments that Republicans critics have made the changes have lowered bank lending and hurt economic growth.
Her remarks prompted a variety of financial market analysts to opine that Yellen’s powerful defence of the 2010 Dodd-Frank Act, which Trump throughout the campaign called a “disaster,” had reduced the likelihood that Trump would pick her for another term.
But Yellen’s supporters noted that she signalled in her speech that the Fed was ready to be flexible in making minor changes that could reduce regulatory burdens, especially on small community banks.
Cohn, another front-runner for the Fed job, wasn’t present for the summit, but several other prominent economists that have been cited as possible candidates were here.
John Taylor, a Stanford University economist famous for its “Taylor Rule” that lays out a rules-based approach to setting monetary policy, engaged in all of the conference discussions. Also present was Glenn Hubbard, dean of the Columbia University Business School, who chaired the Council of Economic Advisers from the George W. Bush administration and has often been cited when the Fed’s top job has come open. In his July interview with the Wall Street Journal, Trump said he had other candidates along with Yellen and Cohn but he declined to name them.
Randall S. Kroszner, a professor at the University of Chicago who played a key role as a member of the Fed’s seven-member board during the 2008 financial crisis, can be seen as someone Trump might opt to choose. He chaired the summit’s final session on Saturday.
While Kroszner stuck into the traditional function of moderating the discussions and maintaining the symposium running on time, it could not hurt that he had a prominent role at a summit attended by the Fed’s top officials in addition to central bank leaders in countries spanning the planet.
1 group at Jackson Hole didn’t have a place on the official program, but they had been the most vocal concerning expressing their opinions on who should be the next Fed chair. Fed Up, a group representing community activists, labor unions and liberal policy groups, held a rally Friday on the grounds of this mountain lodge where the summit took place and presented petitions signed by 20,400 people advocating Trump to select Yellen for another term.
Some protesters dressed as Janet Yellen super heroes complete with green capes and Yellen’s signature white hair to show their support.
The protesters said they thought Yellen would be much superior to Cohn, who spent 26 years on Wall Street as a top executive at Goldman Sachs.
“Yellen Yes, Wall Street No,” one of the signs read.