It was exactly one week ago when just as Bloomberg reported that Yellen was most likely out of consideration as next Fed chair, and as the WSJ reported that Trump was meeting with Kevin Warsh, that Politico reported, for the first time, that discussions with people close to the Fed Chair selection process "confirmed Kevin Warsh and Jerome Powell as the current front-runners with Treasury Secretary Steven Mnuchin said to be favoring Powell. That’s something of a head scratcher to outside observers of the process who did not have Powell on short-lists before the process began. Warsh was always viewed as a top contender though he does not really know President Trump."
Well, since algos have short memories (and humans dont care about news at all), Politico doubled down on what it reported one week ago, and shortly after 3pm ET today, wrote that "Treasury Secretary Steven Mnuchin is strongly pushing for the White House to name Jerome Powell as the next chair of the Federal Reserve – the most powerful economic job in the U.S. government, according to three people close to the selection process."
Mnuchin has privately recommended Powell to President Donald Trump, according to one adviser close to the administration.
Why does the former hedge fund manager and Goldman employee like Power? According to Politico's sources, "Mnuchin, who knows Powell well, feels comfortable with him and feels like Powell is a safe pick over whom he can exert some measure of influence."
Repeating something else we already knew, Politico also adds that the White House list has been whittled down to four candidates:
Powell, a current Federal Reserve governor; Yellen, who was confirmed to the position under President Barack Obama in 2014 and is eligible to be reappointed; Gary Cohn, Director of the National Economic Council and former top banker at Goldman Sachs; and Kevin Warsh, a former Fed governor and fellow at the Hoover Institution who spent years as an investment banker at Morgan Stanley
Repeating what it said last week, the article then goes on to say it really has nothing new to report and notes that "Trump has not settled on any candidate yet... though he is expected to announce his choice in the next few weeks to ensure a nominee is in place by the time current Fed chair Janet Yellen’s term expires in February. "
And while Trump may not have decided, the PredictIt online betting market appears to have flipped, and over the past week pushed Warsh, who until a week ago was the strong favorite for the post deep into second place, while Powell's odds just rose above 50% for the first time, making him far and way the top contender for the Fed job.
The question after all that is whether this latest Politico re-report just a trial balloon to gauge the market response to the shift from a hard "hawk" to an establishment "dove" as next Fed chair narrative, or is Trump really preparing to crown Jay Powell as the next Fed chair, who is really just a continuation of Janet Yellen.