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Trump, Mnuchin Are Said to Meet With Warsh to Discuss Fed Chair

Trump, Mnuchin Are Said to Meet With Warsh to Discuss Fed Chair

Friday, 29 September 2017 10:29 AM

President Donald Trump and Treasury Secretary Steven Mnuchin met Thursday with Hoover Institution fellow Kevin Warsh to discuss potentially nominating him as the next chairman of the Federal Reserve, an administration official said.

As part of the search Trump has also already met with other candidates, said another administration official, who declined to name the other contenders who have sat down with the president.

Warsh is a former member of the Fed’s board of governors. Other people Trump is said to be considering for Fed chair include the current chairwoman, Janet Yellen, Stanford economist John Taylor, former BB&T Corp. CEO John Allison and Columbia University economist Glenn Hubbard. Trump has said he’s also considering White House National Economic Council Director Gary Cohn.

The contest for the position remains an open race as the president isn’t close to a decision, the administration official said. Yellen and Cohn remain potential candidates and the president’s advisers are trying to assure that he has a range of options, the official said.

Investors appeared to respond favorably to the report. The KBW Bank Index erased early losses to rise as much as 0.9% to the highest intraday level since March 1, with top gainers including Regions Financial Corp., SVB Financial Group, Citizens Financial Group Inc., BB&T Corp. and Fifth Third Bancorp.

Two other people familiar with the matter, also speaking on condition of anonymity, confirmed the meeting took place but would not describe the topic. The Wall Street Journal reported on the meeting earlier.

As a Fed governor from 2006 to 2011, Warsh drew on Wall Street experience at Morgan Stanley to play a key behind-the-scenes role in efforts to quell the financial crisis. He’s been a vocal critic of the Fed’s monetary stimulus policies since the crisis, arguing the approach hasn’t been effective and may have dangerous side effects.

“I’m confused frankly about Fed’s normalization strategy,” he told Bloomberg Television’s Vonnie Quinn and Mike McKee in May. “My judgment is, ultimately the Fed’s biggest job is to mitigate the risks of an exponential shock. I see way too much complacency.”

His candidacy is being taken seriously enough that he’s also attracted opposition from left-leaning activists, particularly for his cheer-leading prior to the financial crisis of Wall Street innovations.

A close associate of hedge-fund billionaire Stanley Druckenmiller, he argues that Fed policy makers are too complacent about mounting risks in financial markets. Warsh, 47, was a member of a business advisory council established by Trump and led by Blackstone Group LP CEO Stephen Schwarzman. He is married to Jane Lauder, daughter of Trump friend Ronald Lauder and a global brand president at cosmetic company founded by her grandmother, Estee Laude

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President Donald Trump met with former Federal Reserve Governor Kevin Warsh to discuss potentially being nominated as Fed chairman, a source familiar with the meeting said on Friday.
trump, fed, warsh, chairman, yellen
Friday, 29 September 2017 10:29 AM
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