Activist Group Takes Out TV Ad Calling for Trump to Keep Yellen

By Michael S. Derby Features Dow Jones Newswires

Efforts to influence President Donald Trump's choice to lead the Federal Reserve took an unusual turn Tuesday when a left-leaning activist group did something that might be a first: It ran a television advertisement in favor of one of the candidates.

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The Center for Popular Democracy's Fed Up campaign broadcast a 30-second TV spot urging Mr. Trump to offer Fed Chairwoman Janet Yellen a second term. The ad ran during "Fox & Friends," a morning show the president watches and often reacts to on Twitter.

"We wanted to make sure Trump knew that Yellen is the right choice for the American people and -- according to many conservatives and investors -- the right choice for Trump himself," Fed Up co-director Shawn Sebastian said Tuesday.

The group says Ms. Yellen's approach to raising interest rates slowly would be better for job creation than the more aggressive rate rises some of the other candidates for the job might favor. Mr. Trump met with her to discuss the job and interviewed other contenders, including two -- Stanford University economist John Taylor and former Fed governor Kevin Warsh -- who have sharply criticized the Fed's postcrisis easy-money policies.

The ad may have arrived too late, however. Mr. Trump is likely to nominate Fed governor Jerome Powell to become the next Fed chief and announce his decision this week, according to a person familiar with the matter.

But Fed Up decided it wasn't too late to try to sway the president. The TV ad showed favorable commentary on Ms. Yellen's record from journalists, market participants, liberals and conservatives.

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"We think it's still possible, even at this late hour, that Trump will hear the voices of fellow conservatives who are encouraging him to stick with Yellen because she's delivered consistent job growth and a booming stock market for Trump," Mr. Sebastian said.

The Fed declined to comment, and Messrs. Taylor and Warsh didn't respond immediately for requests for comment.

An election-style campaign ad is a unique development in what already has been a prolonged public process for picking a Fed leader. Mr. Trump has publicly discussed the merits of some of the contenders. Last week, he asked Republican senators for a show of hands on two candidates and asked a TV talk-show host who he thought should get the job. He even teased the announcement by posting a video on Instagram on Friday saying he would announce his choice this week, and it would be "a person who hopefully will do a fantastic job."

The process has given time for other interested parties to weigh in. Several Republican senators raised concerns in recent weeks about Mr. Powell and argued for nominating Mr. Taylor or Mr. Warsh to be the next Fed chairman. But none of the senators has mounted any formal opposition to Mr. Powell, or threatened to vote against him.

Meanwhile, no lawmakers have organized vocal support for Ms. Yellen as some did in 2013, when a group of Democratic senators wrote a letter calling on President Barack Obama to nominate her.

Fed Up has criticized the Fed and Ms. Yellen for raising interest rates over the past two years, fearing higher borrowing costs would prevent all Americans from sharing in the recovery from the financial crisis. Now the group sees her as preferable to the alternatives, and has actively campaigned against Mr. Warsh. The group created a website called "Warsh Is Wrong" laying out why it believes him to be a bad fit for the chairman.

Kate Davidson contributed to this article.

Write to Michael S. Derby at michael.derby@wsj.com

(END) Dow Jones Newswires

October 31, 2017 18:13 ET (22:13 GMT)