In a move poised to reshape the economic landscape, influential economic advisers to former President Donald Trump have unveiled a shortlist of three potential candidates to lead the Federal Reserve in the event of Trump's return to the White House next year. Steve Moore and Arthur Laffer, prominent figures in economic circles, have proposed Kevin Warsh, Kevin Hassett, and Laffer himself as formidable contenders for the esteemed position, sources familiar with the matter revealed.
Kevin Warsh, renowned for his tenure as an economic-policy adviser to President George W. Bush and subsequent service on the Fed's board of governors, emerges as a leading candidate endorsed by Moore and Laffer. Alongside Warsh, Kevin Hassett, former chairman of the Council of Economic Advisers during the Trump administration, garners recognition for his adept leadership in shaping economic policy. Notably, Arthur Laffer, esteemed for his pivotal role in formulating supply-side economics and advocating for landmark tax reforms, including the 2017 tax cuts signed into law by Trump, emerges as a compelling choice in the esteemed trio.
However, Trump, while presented with the esteemed shortlist, has refrained from committing to any specific candidate, according to insiders privy to the discussions. With the expiry of Jerome Powell's term as chair of the Federal Reserve in 2026 and his tenure as a member of the Fed's board in early 2028, Trump is expected to conduct a thorough vetting process in the ensuing months to identify a suitable successor.
While Moore, Laffer, and their cohorts have advanced their recommendations, external stakeholders and interest groups are anticipated to propose additional nominees, contributing to a broader discourse on Fed leadership. Notably, Trump's primary focus remains on selecting a running mate, as underscored by campaign spokesman Steven Cheung, who refrained from divulging details of the private deliberations.
The relationship between Trump and Powell, once characterized by Trump's endorsement of Powell's appointment as chair, soured over time, marked by public criticism and discord over monetary policy decisions. Trump's public admonishments of Powell for interest rate adjustments, coupled with accusations of political bias, underscored the strained dynamic between the two leaders. Despite Trump's reservations, Powell secured Senate confirmation for a second term following President Biden's nomination.
Since departing from office, Trump has accused Powell of partisan motivations, alleging attempts to influence electoral outcomes through monetary policy maneuvers. Powell, in response, has maintained the Fed's commitment to data-driven decision-making aimed at fostering robust labor markets and stable inflation, devoid of political interference.
Moore and Laffer, instrumental in advocating for economic principles espoused by the Committee to Unleash Prosperity, alongside Steve Forbes, Chairman of Forbes Media, continue to champion policies promoting fiscal stability, tax reform, and deregulation. Laffer's distinguished contributions to economic theory, recognized by the Presidential Medal of Freedom awarded by Trump in 2019, underscore his enduring influence in shaping economic policy discourse.
While Moore, Laffer, and their allies remain steadfast in their recommendations, silence prevails from the nominees themselves. Both Laffer and Hassett declined to comment on the matter, while Warsh refrained from responding to requests for statements, underscoring the sensitivity and gravity of the impending decision.
As Trump navigates the intricate landscape of Fed leadership selection, the economic community remains on tenterhooks, awaiting the unveiling of Trump's definitive stance on the future direction of the nation's monetary policy. With the economy poised at a critical juncture, the appointment of a new Federal Reserve chair holds profound implications for economic stability and prosperity in the years to come.
