The New York Times publishes an article on Fed Chairman Jerome Powell:
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Powell cultivated deep ties with Congress, anticipating political reactions.
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Republican Senators Tillis and Thune publicly supported the Fed chairman, support going beyond what Powell expected
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Even critic Kevin Cramer credits Powell’s relationship-building skills
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Trump could rethink his choice of candidate in the face of Senate refusal
When the Justice Department launched a criminal investigation into Jerome Powell on January 9, the White House probably expected the Fed chairman to step down, but he fought back and appears to have won. The question now is whether he is more inclined to remain Fed governor for another two years after his term as chairman ends in May.
The report highlights how he built connections on Capital Hill for years and helped generate a strong response — including from Republicans — regarding possible criminal charges. Sen. Thom Tillis has threatened to block any new Trump nominee, and Majority Leader John Thune is backing Powell.
What happens in May? Powell’s term as president ends, but his term as governor lasts two more years. While some, like Jim Cramer, have suggested a “graceful” exit where Powell would resign to avoid indictment, Powell appears to be digging.
There was a telling comment from well-respected former Fed Vice Chairman Don Kohn who said:
“If he believes that his resignation from the post of governor will endanger the institution and its independence, he would be tempted to stay in office.”
Powell is described as an institutionalist, which we have seen before. If Powell tells the board, he will continue to vote for the remainder of his term, which could be a deciding vote if Trump continues to try to pack the Fed with yes-men.
The report also notes that Kevin Hassett is “a front-runner” and highlights Trump’s comments today that Hassett would likely stay in his job.
“I actually want to keep you where you are, if you want to know the truth,” he told Hassett at an event.
