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Dollar, Bond Yields Tumble On Report Trump Leaning Toward Powell As Next Fed Chart

Courtesy of ZeroHedge. View original post here.

So much for Trump's Senatorial "straw poll" who should be the next Fed chair (which as a reminder, was reportedly won by John Taylor as Janet Yellen's replacement). Moments ago, Bloomberg reported, citing two people familiar with the matter, that of the two finalists, whom we already knew were John Taylor and Jerome "Jay" Powell, Trump is reportedly leaning to Powell as next Fed chair.

Perhaps Trumps was trying to find who the Senate wants in, just to decide the opposite. Or more likely Trump was just tapped on the shoulder by Mnuchin who as we know is a big fan of "establishment" Fed chairs, and who made it clear that only Powell can be the next head of the US money printer. While Powell is "Goldman's" candidate, Taylor is favored by Vice President Mike Pence, Bloomberg's sources have said.

Of course, this is just another trial balloon, just like the bevy of Politico reports on the matter, because as Bloomberg's sources cautioned, the "decision isn’t yet final" and added the usual disclaimer that Trump could change his mind at any time.

The president has promised to make a decision soon and White House officials have said he would reveal his choice before his Nov. 3 trip to Asia.

Powell, a Republican who was appointed to the board in 2012 by President Barack Obama, has backed Yellen’s gradual approach to raising interest rates and earned a reputation as a non-ideological pragmatist.

A lawyer by training, Powell managed the Fed’s response to the 2014 flash crash in Treasury debt. The 64-year-old, who goes by Jay, served at the Treasury Department under President George H.W. Bush, eventually ending up as undersecretary for domestic finance.

As Bloomberg adds, the president has said privately at least twice in the last week that he’s ruled out appointing Cohn to the job: "He’s told advisers that Cohn is doing a great job in his current role and that he wants to keep him at the White House through congressional consideration of his proposed tax overhaul, according to another person."

Warsh, meanwhile, lacks support from Mnuchin, according to two other people familiar with the process, though they would not say why. His tenure on the Fed board has been criticized by a diverse group of economists ranging from Scott Sumner to Nobel laureate Paul Krugman. And his consideration for the top post has rekindled a feud with Randal Quarles, who was confirmed as a Fed governor and vice chairman for supervision earlier this month, people familiar with the matter said.

For now, however, with the threat of the uber-hawkish - at least according to consensus - John Taylor removed, both the dollar…

… and yields are sliding.


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