Mubasher: The decision of who will lead the US’ Federal Reserve bank seems to be coming down to only two candidates, a former Fed governor and a current one.
The candidates in question are former Fed governor Kevin Warsh and current governor Jerome Powell.
For some time now, markets have viewed Warsh as a front-runner to head the Fed, but recently Powell has emerged in what CNBC describes as “compromise candidate”.
US President Donald Trump has met with the two runner-ups along with current Fed chair Janet Yellen and the president’s chief economic advisor Gary Cohn.
Trump is set to issue a statement with his decision in the coming weeks. Yellen’s term expires in February.
According to PredictIt, a predictions market site, Powell ranked first with a 40% chance followed by Warsh with 30%.
“However, the market is thinly traded and volatile, as all four of the candidates have been in the lead at one point or another,” according to CNBC.
Some experts note the similarities between Warsh and Powell as both are likely to favour more flexibility in banking regulations and avoid a hasty intervention in the event of a stock market crash.
However, there are also considerable differences between the two candidates, especially in terms of reduction of the Fed’s $4.5 trillion balance sheet and interest rate moves, reports have shown.
