Trump narrows Fed chairmanship list, decision may come by November

President Donald Trump has narrowed down his list for the Federal Reserve chairmanship to five candidates and he has a target date to make a decision on who will get the central bank’s top job, FOX Business has learned.

Trump’s list of Fed candidates has been broken down to five names, according to sources familiar with the matter, including former Federal Reserve Gov. Kevin Warsh, current Fed Gov. Jerome Powell, former Treasury official John Taylor, National Economic Council Director Gary Cohn and current Fed Chair Janet Yellen, who was appointed by President Obama and whose term expires in February.

The long awaited decision by Trump to either keep Yellen or move on to a chairman of his own will likely be made by his trip to Asia, which is scheduled to begin on November 3, those same sources tell FOX Business.

All of the candidates have met with the president about the Fed’s leadership position, while Yellen will be at the White House for her interview on Thursday, according to people close to the decision making.

The inclusion of Cohn is a surprising one seeing that he was considered to be virtually out of the running after he took on his boss for his response to the violence in Charlottesville, Va. in an interview with the Financial Times in August.

"As a Jewish-American, I will not allow neo-Nazis ranting 'Jews will not replace us' to cause this Jew to leave his job. I feel deep empathy for all who have been targeted by these hate groups. We must all unite together against them," Cohn said at the time

A White House spokeswoman declined to comment at the time of publication. A spokesman for the Fed also declined to comment.

Trump confirmed at a press conference on Tuesday at the White House that he's narrowed down his Fed chair candidate list to Taylor, Warsh, Powell, Cohn and Yellen.

“Within those five you’ll probably get the answer,” he said and later adding he will make the decision in a “short period.”

When asked which candidate he prefers, Trump said “Honestly I like them all, I do. I have a great respect for all of them.”

Trump appeared to intensify his search for Fed chair candidates at the end of September when he met with Warsh and Powell for the job, according to administration officials. After meeting with the potential Yellen replacements, Trump told the press that he’s had four meetings to discuss who should lead the Federal Reserve and is expected to make a decision in two or three weeks.

Trump interviewed Taylor on Wednesday morning for the Fed's top job, White House officials tell FOX Business.

Warsh served as Fed governor from 2006 to 2011, during the financial crisis, and was an economic adviser to President George W. Bush from 2002 to 2006. He was a member of President Trump’s Strategic and Policy Forum, which was disbanded in August when the president was accused of not properly addressing the violent racism that took place in Charlottesville. He was also an economic adviser to GOP presidential candidate Jeb Bush during the 2016 election. He’s currently serving as a visiting fellow at Stanford University’s Graduate School of Business.

Warsh could be a frontrunner for the job because of his indirect family ties to the president. He’s married to Jane Lauder, the daughter of Trump’s close friend Ronald Lauder and heir to the Estee Lauder Company (NYSE:EL).

Powell is a current member of the Federal Reserve Board of Governors and was a partner at the Carlyle Group, a private equity firm, from 1997-2005. He also served as undersecretary for the United States Treasury under President George H.W. Bush from 1990-1993.

Taylor is a professor of economics at Stanford University and served as the undersecretary for the Treasury during President George W. Bush’s first term. He’s also known for a paper he proposed called the “Taylor Rule,” which was a recommendation about how nominal interest rates should be determined.

The frontrunner for the position is unclear, but according to sources in Washington, D.C. including policy think tanks and lobbyists, Powell is starting to become the favorite to be Trump’s choice as Fed chair and Taylor may end up being the Fed’s vice chairman, as it’s being vacated by Stanley Fischer. In a letter to the Fed in September, he said he would step down on or around October 13.

Stephen Myrow, managing partner at Beacon Policy Advisors, a political research firm in Washington, says he expects the two to be brought on board together and to replace Yellen and Fischer simultaneously.

“I think the most likely outcome is chair (to) Powell and vice chair (to) Taylor, but vice-versa is our second most likely outcome. Conservatives led by (Mike) Pence are making a strong push for Taylor,” Myrow tells FOX Business.

In a recent note to clients, Beacon said it believes that Powell will be chosen to replace Yellen because he’s the preferred candidate of Treasury Secretary Steven Mnuchin.

“At the moment, we see that likely candidate being Powell, as he is currently the candidate with the path of least resistance to getting confirmed,” the note said. “As of now, Powell has yet to receive any notable criticism from major factions of the GOP. The preferred candidate of Treasury Secretary Steven Mnuchin, who is at least ostensibly playing a role in the Fed chair selection, Powell most represents Trump's preferences in a Fed chair. Powell, unlike Warsh or Taylor, believes in a more dovish approach to monetary policy,” the advisory firm added.

While Yellen seems to be on the outs as Fed chair, she addressed her future at a press conference in September, telling reporters “I intend to serve out my term as chair, and that I’m really not going to comment on my intentions beyond that.”