You are here

Trump may be Yellen's unlikely advocate at White House: sources

[WASHINGTON] Janet Yellen's only advocate in the White House may be the one person who matters most: President Donald Trump.

The incumbent Federal Reserve chair was impressive in an Oval Office interview with Mr Trump on Thursday, several people familiar with the matter said. She made clear to the president that she wants to keep her job, set no preconditions for appointment to a second term, and offered suggestions for the vice-chairman position that were welcomed by the Trump team.

Ms Yellen, the first woman to lead the US central bank, also made the case that the economy is doing well, and that Fed policies have been supportive of growth. Mr Trump, who'd be bucking conservatives in his own party if he opts to reappoint Ms Yellen, has said he'll decide by Nov 3 who to nominate as Fed chair when her term ends in February.

The president, in a lunch meeting with Senate Republicans on Tuesday, asked for a show of hands in support of John Taylor, Jerome Powell and Ms Yellen. He didn't announce a winner and most of the senators didn't raise their hands. But of those who did, "I think Taylor won," said Senator Tim Scott of South Carolina.

sentifi.com

Market voices on:

Confidence in the central bank is critical for continued economic growth and job creation, something Mr Trump frequently claims as an accomplishment. The president also often touts the stock market's boom since his election, a run that could be threatened should financial markets perceive him to be seeking a change in direction at the Fed.

Under Ms Yellen, unemployment was at 4.2 per cent in September, a 16-year low, and the economy is in its ninth year of expansion. Inflation and interest rates are low and she is gradually backing off crisis-era policies and unwinding the Fed's US$4.5 trillion balance sheet.

Fed spokeswoman Michelle Smith declined to comment on Ms Yellen's renomination prospects.

Mr Trump's interview of Ms Yellen was regarded as serious, not just a courtesy, two of the people said. The president genuinely considers her a finalist for the job, the people said, despite misgivings among many of his closest advisers.

"I really like her a lot," he said on Friday in an interview with Fox Business Network broadcast on Sunday.

BLOOMBERG