WSJ pitches outsider to lead Fed

The conservative Wall Street Journal editorial board is urging President Trump to nominate an outsider to be the next chairman of the Federal Reserve.

In an editorial posted late Tuesday, the Journal implored Trump not to re-nominate current Chairwoman Janet Yellen or Fed Governor Jerome Powell, warning that they have “favored the affluent and done little or nothing for the real economy.”

{mosads}Instead, the Journal is pressing Trump to nominate one of three candidates they view as more in line with his campaign promises and worldview — former Fed Governor Kevin Warsh, Stanford economist John Taylor or Glenn Hubbard, dean of Columbia University’s business school.

“Ms. Yellen and Mr. Powell represent the monetary policies that have prevailed since the 2008 financial panic — and whose consequences Mr. Trump campaigned against,” the Journal writes. “These include bond-buying to drive investors into riskier assets like stocks and junk bonds. This was helpful in the gale of the 2008-2009 panic but has been counterproductive as time has gone on.”

“Outsiders like Messrs. Warsh and Taylor, or Columbia’s Glenn Hubbard, believe that tax reform and deregulation can increase the economy’s capacity to grow above 3 percent,” the op-ed continues.

The editorial said it would be a “stunner” and a total break from Trump’s campaign rhetoric if he were to “bet on the Yellen-Powell Fed for the next four years.”

“It would be comparable to promising as a presidential candidate to nominate someone like Antonin Scalia to the Supreme Court and then nominating a younger version of Ruth Bader Ginsburg,” the Journal writes. “Mr. Trump needs a Fed Chairman who won’t be a hostage to the Fed staff or at odds with the President’s growth agenda. He needs an outsider who is a reformer.”

Yellen’s term expires in February, and Trump has said a decision on who he will nominate could come in weeks.

The president has said that he’s met with at least four candidates about the job. Reuters has reported that Warsh, who resigned from the Fed board over its quantitative easing policy, was one of the candidates Trump met with.

But Trump is also believed to be considering National Economic Council Director Gary Cohn for the role and has mused about giving Yellen another term.