Coverage: Powell will be the next Fed chair

The White House has notified Federal Reserve Board governor Jerome Powell that President Donald Trump intends to nominate him as the next chairman of the central bank, replacing Janet Yellen.

Kate Davidson, Peter Nicholas and David Harrison of The Wall Street Journal broke the news:

In his five years at the Fed, Mr. Powell has been a reliable ally of Ms. Yellen and would likely continue the Fed’s current cautious approach to reversing the central bank’s crisis-era stimulus policies as the economy expands.

That would mean gradually raising short-term interest rates in quarter-percentage-point steps through 2020 while slowly shrinking the Fed’s $4.2 trillion portfolio of Treasury and mortgage-backed securities it purchased to lower long-term rates.

Mr. Powell’s nomination would mark the first time in nearly four decades that a new president hasn’t asked the serving Fed leader to stay on for another term, even though that person was nominated by a president of a different party. The last time a first-term president didn’t do that was in 1978, when President Jimmy Carter chose G. William Miller to succeed Arthur Burns.

The president spoke with Mr. Powell on Tuesday, according to people familiar with the matter who couldn’t describe what they discussed.

Maggie Haberman and Binyamin Appelbaum of The New York Times reported that the Powell selection is a “safe” choice:

One White House official described Mr. Powell as a “safe” choice as well as the candidate who most closely fit Mr. Trump’s penchant for filling top jobs with characters from “central casting,” as he has often put it.

Both people familiar with the president’s thinking, who spoke on the condition of anonymity, cautioned that Mr. Trump was notoriously mercurial and liked creating drama around important personnel decisions. However, both said the president appeared set on Mr. Powell. An announcement could come as soon as Thursday, after the Fed wraps up a two-day policy meeting on Wednesday and before Mr. Trump leaves on Friday for a 12-day Asia trip.

The choice would cap an unusually public selection process, during which the president has openly discussed his views of various candidates, asked Republican senators to vote by raising their hands for those under consideration and sought the opinion of a television host. Mr. Trump also posted a video on Instagram promising “everybody will be very impressed” with his selection.

Ben White and Victoria Guida of Politico reported the announcement will come Thursday at 3 p.m.:

Powell received a handful of “no” votes from Republicans during his initial confirmation to the Fed. But Capitol Hill Republicans say if nominated he would likely win fairly easy confirmation to succeed Yellen, who became the first woman to lead the central bank in 2014.

Trump criticized Yellen sharply during the 2016 campaign but later warmed to her and included her among the final candidates for the Fed. But people close to the president say he is eager to leave his own mark on the Fed with a new chair. And Trump has shown a consistent desire to move on from policies and personnel left over from Obama.

National Economic Council Director Gary Cohn was initially a leading candidate for the Fed job. But his relations with Trump soured after Cohn criticized the president’s response to racially charged protests in Charlottesville. Trump lately has told people that he wants Cohn to stay focused on the tax reform efforts.

Trump’s choice will end months of reality-show-style speculation about who will lead the central bank over the coming years.