Stocks Spooked By News Trump Interviewed John Taylor For Fed Chair Job

Tyler Durden's picture

Many years ago, when it was still unclear who would replace then outgoing Fed chair Ben Bernanke, Zero Hedge endorsed John Taylor for the role of Fed chair: a futile endorsement as it had no chance of ever coming true due to Taylor's famous and long-running feud with the Fed over what the true Fed Funds rate should be, and the various pro forma adjustments the Fed imposed upon Taylor's own "Taylor Rule."

Well, maybe not, because with the market convinced that the next Fed chair will be either hawk Kevin Warsh or dove Jay Powell, moments ago the WSJ reported that, out of the blue, President Trump also interviewed the iconic Stanford University economist, the namesake of the eponymous Taylor Rule, on Wednesday to discuss his potential nomination to become Federal Reserve chairman.  Citing a White House official, the WSJ reported that Treasury Secretary Steven Mnuchin and Vice President Mike Pence also attended the meeting.

The news is surprising, and may have been the catalyst for the market's poor close, as Taylor has been a frequent critic of Fed policy in the years since the crisis, arguing that officials should have raised interest rates sooner and testifying on Capitol Hill on the benefits of following a mathematical formula to help guide interest-rate decisions.

Mr. Taylor—the namesake for the most well-known monetary policy rule, the Taylor Rule—has said the Fed’s unconventional, discretionary policies were ineffective.

“Economic growth came in consistently below what the Fed forecast and much weaker than in earlier recoveries from deep recessions,” he said in a Wall Street Journal op-ed in December 2016. “Such policies discourage lending by squeezing margins, widen disparities in income distribution, adversely affect savers and increase the volatility of the dollar.”

The WSJ report means that - to the chagrin of all bubble lovers - John Taylor is now officially one of the handful of candidates under consideration for the job, together with Warsh, Powell all of whom Trump met with late last month. Fed Chairwoman Janet Yellen, whose term as Fed chief expires in early February, is also among a list of final contenders for the job, according to people familiar with the matter.

“There is still ongoing interviews,” White House Chief of Staff John Kelly told reporters Thursday about the search for a Fed leader. “All of the people that have been in to interview have been really first-round draft choices, and we have more to come.” Trump said in late September he wanted to announce a decision on the Fed chairman job within three weeks.

Still, we doubt that a president who is surrounded by ex-Goldmanites all day, every day, will be so brash as to promote the one candidate whose policies will have the most adverse impact on Goldman Sachs, and online betting odds confirm this: as of moments ago, after the WSJ news broke, Taylor is thrd in the rankings with a 19% chance, behind Warsh with 27% and Mnuchin's personal favorite, Powell, in top spot by a vast margin, at 46%.

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JoeTurner's picture

The irony of course is that the jew gangsters that own/run the FED will only put a list of (((their))) people in front of the POTUS for selection. How about Trump pick Ron Paul for FED chair just to make them vaklempt !

Paul Kersey's picture

Oy yoy yoy,
the Fed Chair a goy?
Baruch atah adonai
To share in such joy.

yogibear's picture

Never will be a Goy for a Fed chairman.

Escrava Isaura's picture

yogibear: Never will be a Goy for a Fed chairman.

It’s unbelievable. Japan lower rates to zero in 1999, almost 20 years ago. What did it do to generate jobs?


Hedgers, we don’t have a rate problem. We have a lack of money problem.

Taylor ‘rate’ rule "must now be discarded into the trash bin of history" – Bill Gross


Paul Kersey's picture

"It’s unbelievable. Japan lower rates to zero in 1999, almost 20 years ago. What did it do to generate jobs? Nothing."

How many more jobs do you think Japan needs to generate? There are so few folks to fill jobs in Japan, that people over 70 are coming back into the workforce. You might want to do a little research before you post such statements, like the one you posted above.

"Japan's unemployment rate falls to 22-year low of 2.8% in February. Japan's unemployment rate fell to 2.8 percent in February, the lowest in more than 22 years, offering a positive sign for the country's economy, government data showed Friday."

Escrava Isaura's picture

When things don’t look good Japanese government lie just like any other government.

Second, most jobs created in Japan are par times.

Third: It’s bank credit that creates jobs. No credit. No jobs.

Fourth: Economies, jobs, and wages perform better when they are central planning. Deregulation, liberalization and privatization do not enhance growth – they reduce it. Richard A. Werner.

Good luck telling that to the brainwashed Hedges.



gilhgvc's picture

well professor, pushing YOUR own website is vergoten here, especially when you are a central govt planning idiot. Never in my life have I seen so many "professors" who have no clue how the real world works. most went staright from grad student into teaching and have never had a real job. Kinda like you, I'm betting

BarkingCat's picture

Seriously? Did you just say that jobs, economies and the wages perform better under central planning? Are you really that stupid or just a lying asshole?

We do not have to go back in history very far to prove that Central planning does not work well. You can look at centrally planned economies of the former Soviet Union, Poland, Czechoslovakia, Bulgaria, Romania, Yugoslavia, East Germany and see how great they did from 1945 through 1990 when whole thing collapsed.

I spent my childhood in one of those economies. Do you know what it's like to walk into a grocery store and empty meat hooks?

Or as a child running home to inform your mother that toilet paper showed up in the store.

 Yes, show shortages of toilet paper in communist shitholes are nothing new and did not start with Venezuela.

Escrava Isaura's picture

Every industrial society is central planning.

Third world shortages are what you would see in the industrial societies if they were not central planning.

How you can be so sure?

Easy. Post collapse (2017/2032) all industrial societies are going to starve to death, even worse off than the examples that you gave.


N2OJoe's picture

The useless eaters will starve in a collapse as they always do, while productive indepentent people will struggle through then thrive, as they always do.

No one is really worried about the FSA useless eaters beyond how best to give them their free lead injection when they come knocking.

Endgame Napoleon's picture

I bet the Japanese don’t count moms who work part-time, with welfare covering their rent and groceries and child tax credits that equal 4 months of full-time wages, as employed, either, unlike our deceptive leaders, using their rigged-up US unemployment numbers. Since Japan does not undermine its citizen workforce with hordes of welfare-buttressed immigrants, their [employment] rate reflects employment of citizens.

Archibald Buttle's picture

government data showed? ahhh hahahahahahaha!

MaxThrust's picture

This is just Goy flavoured cover for when they elect another Tribe member to the FED chairmanship.

Mnumchin, Cohen or Yellen. Its practically baked into the cake.

JoeTurner's picture

good shabbas shabos goy !

overbet's picture

How about he interview Ron Paul for the job after I pick up some SPY puts.

koaj's picture

Wake me when he interviews Jim Grant or Ron Paul...

dead hobo's picture

Powell = eventual negative interest rates = dystopia in 25 years. Glad I'm old.

Warsh = living breathing economy on the horizon.

Taylor = same as Warsh


GotAFriendInBen's picture

Nothing spooks stocks

This was just Dimon and pals collecting some lunch money

Sanity Bear's picture

This being Trump we're talking about, it's fully possible that he may have been referring to John Taylor, bass player for Duran Duran.

lasvegaspersona's picture

THAT John Taylor is too old...have you seen Duran Duran lately? They may be hungry like the wolf...but they haven't missed too many meals lately.

Quivering Lip's picture

Why is it that intelligent people seem to think that the people and families worth hundreds of billions if not trillions of £,¥,€ and $ that own the banks that own the CB'S would leave monetary policies to people that make $200,000 a year.


Rainman's picture

good question ... spot on

Endgame Napoleon's picture

The biggest bigwigs do often leave the salaries of the vast majority of workers to those making $200,000 per year. Those people often choose to pay most employees $20,000 per year or less, hiring mostly a low-wage workforce with unearned income from spouses, child support checks, welfare that covers rent and groceries and a child tax credit of up to $6,269 from the US Treasury Department. They can accept rock-bottom wages because of unearned income that finances their major bills. The labor cost savings must up the bonuses of the $200,000 crowd, explaining why they tolerate so much absenteeism from those with “somethin’ comin’ in” from government.

shizzledizzle's picture

You sure it wasn't Helicopter Ben talking about price controls because the inflation that isn't happening is about to blow up?

atlasRocked's picture

My first thought was Ben is making up CYA.

JailBanksters's picture

I don't like the sound of that, he doesn't sound Jewish at all.

Surely Trump knows the FED is Jew Club.


JailBanksters's picture


Thumbs down presumably because they think I'm a Racist

because I pointed out the FED is a Jew Only Club.


Can you spot the Irony !


Carl Panzram's picture

Is this the October 12th event my balls have aching for?

mc888's picture

The Taylor Rule is dependent on the 'actual' inflation rate compared to the target inflation rate.

Would he use the current fradulent BLS model? He published in the 90's, so he may prefer the 1990 model.

Bang zoom. Fed funds rate is 5% bitchez.

Disgruntled Goat's picture

A gentile? Today just keeps getting better and better...

Omega_Man's picture

kabal will nuke us all, if a goy takes charge

atlasRocked's picture


The FED policies are so fraudulent, so bubblicious, the way you tell the best FED chairman candidate is see which one lowers the stock market the most when interviewed.    


John Taylor of Stanford is the best candidate.


Rebelrebel7's picture

I am heartbroken,  devastated, and disappointed that Zero Hedge would endorse anyone to be Fed chair. 

The Federal Reserve should cease to exist and therefore have no chair.

This was more traumatic than finding out that my parents were Santa Clause, and humans that made mistakes.

ilovetexas's picture

Trump loves debt, which means he will love a dove. Trump is bluffing again by interviewing John. Let's see if that's the case. Trump is highly predictable.

Conscious Reviver's picture

All these posts about a goy will never be the Fed chair. I disagree. When the Mother of All Crashes is tee'd up and ready the ZinoBanksters are likely to pick a nonJew for the photo shoots of the useful idiot at the helm as the Fed Titanic strikes iceberg. In fact, the "market" was probably spooked just because Taylor's nonKosher name came up and all that implies.