Under pressure from fresh allegations against his campaign team, US President Donald Trump is preparing to announce Fed governor Jerome Powell as his choice to replace Janet Yellen at the head of the central bank.
Sources familiar with the matter told the news agency Reuters on Monday that Jerome Powell was the leading candidate of the Trump administration, with the White House saying the US president was being expected to make the official announcement on Thursday.
A US Federal Reserve governor since 2012, Powell is a well-known figure among bankers and investors. He worked as a partner at Carlyle Group from 1997 to 2005 after serving briefly in the administration of George W. Bush as US Treasury Secretary.
Donald Trump has been deliberating between Powell alongside current chair Janet Yellen, and John Taylor, a Stanford economist who were also on the White House short list.
By picking Powell, Trump would get a combination of a change in leadership with the continuity offered by somebody who has been a part of the Yellen-run Fed that has kept the economy and markets steady in recent years.
Powell, 64, has supported Yellen's general direction in setting monetary policy, and in recent years has shared her concerns that weak inflation justified a continued cautious approach to raising rates.
By contrast, Taylor has been more hawkish on monetary policy and critical of the Fed's stimulus program, which has made him the favorite candidate of conservative Republicans who want the central bank to rely more on rules when setting interest rates.
Current Fed chair Janet Yellen appears to have dropped out of the race as Trump has repeatedly expressed a desire to make his own personal mark on the central bank. After all, the US president has regularly criticized Yellen during his election campaign.
Donald Trump said on Friday that Americans were "anxiously" awaiting his announcement and that everybody would be "very impressed" by his decision. "It will be a person who hopefully will do a fantastic job," he added.
As the race to be the Fed chair has turned into a public spectacle, the US president is under mounting pressure from a new scandal surrounding his former campaign team.
An FBI investigation looking into the Trump campaign teams links to Russia has indicted the president's former campaign manager, Paul Manafort, and striking a plea bargain with an ex-aide, George Papadopoulos. The charges against the two mark the most serious legal threat to Trump since Robert Mueller was appointed special FBI counsel in May.
But a White House spokeswomen said the two cases had "nothing to do” with the activities of the president and his campaign. Spokeswomen Sarah Sanders described Papadopoulos' role with the campaign as "extremely limited," Donald Trump tweeted that there was "no collusion."
uhe/tr (Reuters, AFP, dpa)