Swordsmyth
10-12-2017, 03:49 PM
Many years ago, when it was still unclear who would replace then outgoing Fed chair Ben Bernanke, Zero Hedge endorsed John Taylor for the role of Fed chair: a futile endorsement as it had no chance of ever coming true due to Taylor's famous and long-running feud with the Fed over what the true Fed Funds rate should be, and the various pro forma adjustments the Fed imposed upon Taylor's own "Taylor Rule."
Well, maybe not, because with the market convinced that the next Fed chair will be either hawk Kevin Warsh or dove Jay Powell, moments ago the WSJ reported that, out of the blue, President Trump also interviewed the iconic Stanford University economist, the namesake of the eponymous Taylor Rule, on Wednesday to discuss his potential nomination to become Federal Reserve chairman. Citing a White House official, the WSJ reported that Treasury Secretary Steven Mnuchin and Vice President Mike Pence also attended the meeting.
The news is surprising, and may have been the catalyst for the market's poor close, as Taylor has been a frequent critic of Fed policy in the years since the crisis, arguing that officials should have raised interest rates sooner and testifying on Capitol Hill on the benefits of following a mathematical formula to help guide interest-rate decisions.
Mr. Taylor—the namesake for the most well-known monetary policy rule, the Taylor Rule—has said the Fed’s unconventional, discretionary policies were ineffective.
“Economic growth came in consistently below what the Fed forecast and much weaker than in earlier recoveries from deep recessions,” he said in a Wall Street Journal op-ed in December 2016. “Such policies discourage lending by squeezing margins, widen disparities in income distribution, adversely affect savers and increase the volatility of the dollar.”
The WSJ report means that - to the chagrin of all bubble lovers - John Taylor is now officially one of the handful of candidates under consideration for the job, together with Warsh, Powell all of whom Trump met with late last month. Fed Chairwoman Janet Yellen, whose term as Fed chief expires in early February, is also among a list of final contenders for the job, according to people familiar with the matter.
“There is still ongoing interviews,” White House Chief of Staff John Kelly told reporters Thursday about the search for a Fed leader. “All of the people that have been in to interview have been really first-round draft choices, and we have more to come.” Trump said in late September he wanted to announce a decision on the Fed chairman job within three weeks.
More at: http://www.zerohedge.com/news/2017-10-12/stocks-spooked-news-trump-interviewed-john-taylor-fed-chair-job
Well, maybe not, because with the market convinced that the next Fed chair will be either hawk Kevin Warsh or dove Jay Powell, moments ago the WSJ reported that, out of the blue, President Trump also interviewed the iconic Stanford University economist, the namesake of the eponymous Taylor Rule, on Wednesday to discuss his potential nomination to become Federal Reserve chairman. Citing a White House official, the WSJ reported that Treasury Secretary Steven Mnuchin and Vice President Mike Pence also attended the meeting.
The news is surprising, and may have been the catalyst for the market's poor close, as Taylor has been a frequent critic of Fed policy in the years since the crisis, arguing that officials should have raised interest rates sooner and testifying on Capitol Hill on the benefits of following a mathematical formula to help guide interest-rate decisions.
Mr. Taylor—the namesake for the most well-known monetary policy rule, the Taylor Rule—has said the Fed’s unconventional, discretionary policies were ineffective.
“Economic growth came in consistently below what the Fed forecast and much weaker than in earlier recoveries from deep recessions,” he said in a Wall Street Journal op-ed in December 2016. “Such policies discourage lending by squeezing margins, widen disparities in income distribution, adversely affect savers and increase the volatility of the dollar.”
The WSJ report means that - to the chagrin of all bubble lovers - John Taylor is now officially one of the handful of candidates under consideration for the job, together with Warsh, Powell all of whom Trump met with late last month. Fed Chairwoman Janet Yellen, whose term as Fed chief expires in early February, is also among a list of final contenders for the job, according to people familiar with the matter.
“There is still ongoing interviews,” White House Chief of Staff John Kelly told reporters Thursday about the search for a Fed leader. “All of the people that have been in to interview have been really first-round draft choices, and we have more to come.” Trump said in late September he wanted to announce a decision on the Fed chairman job within three weeks.
More at: http://www.zerohedge.com/news/2017-10-12/stocks-spooked-news-trump-interviewed-john-taylor-fed-chair-job