Ricky Nelson, head of corporate dealing at currency specialist Halo Financial, says YES.
Speculation about Janet Yellen serving another term as chair of the Federal Reserve when the time comes in January has continued for months.
During the presidential campaign, Donald Trump insisted he would fire Yellen early on in his presidency – but this, among other things, did not materialise. Trump has now gone on record saying that he is undecided on the issue and that keeping Yellen is a possibility.
Leading contender Gary Cohn fell out of favour after a disagreement with Trump over his response to a white supremacist protest in Charlottesville.
Stock markets hit new highs this summer, despite talks of unwinding stimulus; the US economy is growing steadily; and job growth is robust, helping push the unemployment rate down to 4.3 per cent – all compelling reasons for maintaining the status quo.
If Trump and Yellen can find some common ground on the President’s preference for less regulation, the outcome may not be as cut and dried as many seem to think.
Danae Kyriakopoulou, chief economist and head of research at OMFIF, says NO.
Sticking to the status quo would be the path of least resistance for President Trump when it comes to choosing the next Fed chair, but he is unlikely to follow it and reappoint Yellen to the position when her term ends in February 2018.Despite her accomplishments, solid credentials, and compatibility with the president’s preferences for a low-rates-orientated monetary environment, he sees her as providing unwanted continuity of the Obama administration.
Moreover, her vocal defence of regulatory measures taken in recent years contradicts the Republican party’s determination to reverse them.
In terms of who might replace her, in a survey of policymakers, academics and market participants from the fields of monetary policy, economics and finance conducted by OMFIF in September, 50 per cent of respondents picked Gary Cohn, against 31 per cent for Yellen and 19 per cent for “other”.
Kevin Warsh, John Taylor, Glenn Hubbard and Jerome Powell are all possible candidates, but some have criticised the Fed’s loose policies and advocate higher rates, which would not be Trump’s preferred policy path.