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

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%.

Comments

JoeTurner Thu, 10/12/2017 - 16:15 Permalink

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 !

Escrava Isaura yogibear Thu, 10/12/2017 - 16:33 Permalink

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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? Nothing. 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  

In reply to by yogibear

Paul Kersey Escrava Isaura Thu, 10/12/2017 - 16:39 Permalink

"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."

In reply to by Escrava Isaura

Escrava Isaura Paul Kersey Thu, 10/12/2017 - 17:42 Permalink

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. https://professorwerner.org/shifting-from-central-planning-to-a-decentralised-economy-do-we-need-central-banks/  
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In reply to by Paul Kersey

BarkingCat Escrava Isaura Fri, 10/13/2017 - 00:19 Permalink

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.

In reply to by Escrava Isaura

Escrava Isaura BarkingCat Fri, 10/13/2017 - 05:45 Permalink

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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.  

In reply to by BarkingCat

Endgame Napoleon Paul Kersey Thu, 10/12/2017 - 19:12 Permalink

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.

In reply to by Paul Kersey

dead hobo Thu, 10/12/2017 - 16:18 Permalink

Powell = eventual negative interest rates = dystopia in 25 years. Glad I'm old.Warsh = living breathing economy on the horizon.Taylor = same as Warsh 

Quivering Lip Thu, 10/12/2017 - 16:44 Permalink

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. 

Endgame Napoleon Quivering Lip Thu, 10/12/2017 - 19:20 Permalink

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.

In reply to by Quivering Lip

atlasRocked Thu, 10/12/2017 - 18:54 Permalink

 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 Thu, 10/12/2017 - 18:59 Permalink

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 Thu, 10/12/2017 - 20:07 Permalink

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 Fri, 10/13/2017 - 10:39 Permalink

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.