Former Head of Goldman Sachs is First Choice to Replace Yellen

Following up on the nomination of Randall Quarles as the overseer of the banking system in the US, there is increasing talk in the American media that the US President is unlikely to nominate the current Fed Chairwoman Yellen for a second term. Trump is likely to nominate Gary Cohn, former head of Goldman Sachs and current Director of the NEC, for the position as he rushes to fill Fed vacancies with members who are more in line with his economic and monetary outlook.
Sources say that Cohn is likely to be requested to take the job, and that the job is his if he wants it. The sources also say that, as of now, it looks as though he would like to take it. He is a former President of Goldman Sachs who has a penchant for higher rates and this is likely to rankle some Senate members who find this at odds with their monetary outlook. But it is generally believed that if he is nominated, it is likely to go through the Senate without too many issues as his supporters are in the majority.

Fed Being Packed With Ex-Bankers

It is pretty clear that the Fed is being loaded with alums from Goldman Sachs and other such private financial institutions. Trump may shift the composition of the Fed’s board so that it favors higher rates in the long term, something which banks and other such institutions would love to see.

The post of Chair will become vacant only in February, and it is unlikely that Trump will show his hand anytime soon. Sources cited in the article say that Cohn’s nomination is pretty much sealed, and if opposition were to grow from hawkish Republicans, then the next likely candidate is Warsh, who is currently at Hoover.

Sources say that this move would reinforce the belief of many experts that the Fed is increasingly moving towards favoring banking institutions and brokers. The financial industry thrives on aggressive monetary policy and higher interest rates, which helps institutions make the maximum possible margin on client deposits.

Source: Finance Magnates

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