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Vanguard's Jack Bogle to Trump: Give Fed's Yellen a Second Term

Image: Vanguard's Jack Bogle to Trump: Give Fed's Yellen a Second Term

By    |   Thursday, 28 Sep 2017 06:22 PM

Investing guru Jack Bogle is urging President Donald Trump to appoint Janet Yellen to a second term as Federal Reserve chairman.

Yellen has presided over an expanding economy during her entire term. The stock market has hit record highs, and unemployment this year touched the lowest level since 2001. The jobless rate in August stood at 4.4 percent, Bloomberg reported.

“There’s an old saying here in the U.S.: ‘You can’t beat somebody with nobody.’ One of the main reasons I like Janet is because I have no idea who might replace her,” Bogle told fnlondon.com.

Yellen, who was named as the Federal Reserve chairwoman in 2014, is appointed through January 2018. Aside from Yellen and National Economic Council Director Gary Cohn, Bloomberg News reported earlier this this month that the White House is also considering former Fed governor Kevin Warsh, Columbia University economist Glenn Hubbard, and Stanford University professor John Taylor for the job.

In addition, there are two bankers under consideration: John Allison, the former chief executive officer of BB&T Corp., and Richard Davis, the former CEO of US Bancorp.

“Janet’s reputation is still very good,” said Bogle, the founder of the Vanguard Group, the world’s largest provider of mutual funds with $4 trillion in global assets under management.

Trump and Yellen have met personally, and the president said in July that both Yellen and Cohn were being considered for the job, as well as other candidates.

However, on the campaign trail last year Trump repeatedly said he would replace Yellen as the Fed chairman. Candidate Trump also said the Fed had kept rates low to help President Barack Obama's administration.

“Trump may not like her appreciation of strong regulation but the Dodd-Frank Act, for example, has been a tremendous advantage for banks and I think the enlightened bankers realize that and are not nearly as interested in undoing it as some people might think,” Bogle said.

Meanwhile, the 88-year-old legendary investor also believes the Fed will raise interest rates twice over the next 12 months.

“The Fed is doing what everybody knew they were ultimately going to do. That’s why, at least so far, the market has taken the news with some considerable equanimity,” Bogle said.

“Over the next year I expect to see two rises from them. But we just don’t know what they’re going to do as they may, or may not, have a new chairman. As one might say, it’s a very fluid situation.”

As far as Yellen's fate, not everyone is as optimistic as Bogle.

Republican Senator Richard Shelby said he doesn’t think Trump will nominate Yellen for a second term at the helm of the U.S. central bank, Bloomberg reported.

Shelby said Tuesday in an interview with Bloomberg Television’s Vonnie Quinn that he had spoken with the president about the Fed.

“I believe he will appoint somebody else to take her place,” the No. 2 Republican on the Senate Banking Committee said. “But ultimately, that is up to the president.”

Shelby has served for years on and previously led the Senate panel, which has direct oversight responsibility for the central bank and casts the first vote on White House nominees for the Fed Board of Governors. Some of the Alabama Republican’s former staff members are also now working in the Trump administration and are helping oversee Fed nominations.

“I would like to see somebody else in there that’s pro-growth,” Shelby said.

(Newsmax wires services contributed to this report).

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Investing guru Jack Bogle is urging President Donald Trump to appoint Janet Yellen to a second term as Federal Reserve chairman.
jack bogle, fed, janet yellen, donald trump
Thursday, 28 Sep 2017 06:22 PM
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