Who the Trump-nominated Federal Reserve (Fed) chair will be remains a mystery. Four candidates have been put forward so far, all during Trump's "apprenticeship period."
Inside information: Trump may be seeking a non-existent "all-in-one" candidate: someone who can carry out the president's demand for rate cuts, has enough credibility among Wall Street and colleagues to push policies through, and can pass the Senate confirmation vote without getting stuck.
Treasury Secretary Bensons is in charge of overseeing the selection, with four shortlisted candidates:
Walsh, former Fed board member
Walle, current Fed board member appointed by Trump in 2020
Reed, a senior executive at BlackRock
Hasset, the White House National Economic Council Director.
These four represent different trade-offs between Trump's multiple requirements of "wanting to have it all." At most two of the three requirements are met, but no one fulfills all three.
Among them, Walle is very popular on Wall Street, partly because he is most like Powell, as an insider within the Fed, always supporting low interest rates based on rational arguments, with the labor market being his top priority.
The latest Fed decision, as widely expected, left the federal funds rate unchanged, maintaining it at 3.5% to 3.75%, marking the first time since September last year that the Fed has stopped cutting rates. After three consecutive cuts, the current challenge is to determine what conditions are needed to restart rate cuts.
According to the statement from the Federal Open Market Committee (FOMC), the committee has raised its assessment of economic growth, reduced concerns about the labor market, and shifted focus more toward inflation.
The statement said, "Indicators suggest the economy is expanding at a solid pace, employment growth remains weak, and the unemployment rate shows signs of stabilization, while inflation remains at a relatively high level."
The latest statement removed the previous wording that "the risk of a weaker labor market is higher than the risk of rising inflation." This means the Fed believes the "dual mandate" of price stability and full employment is becoming balanced, and there is reason to take a more patient approach in decision-making.
Board member Walle and Millan voted against keeping rates unchanged, both advocating for another 25-basis-point rate cut. Walle is one of the four candidates. Millan is also a loyal supporter of Trump.
Trump's legal action against former Chair Powell sends a strong signal: the new chair must comply with the request for rate cuts, or face lawsuits. Be careful.
Original article: toutiao.com/article/1855615086557641/
Statement: This article represents the views of the author alone.