Deutsche Bank speculation about the next Fed chair

by on February 16, 2017 at 7:27 pm in Current Affairs, Economics, Political Science | Permalink

Here are some names that could fit the bill according to the folks at DB:

Kevin Warsh – currently a visiting fellow at the Hoover Institution, he served on the Board of Governors from 2006 until 2011. The report described him as “an experienced private financial market practitioner with strong Republican credentials”.

Jerome Powell – a current Fed governor “viewed as having conventional/centrist views about the economy and markets with slightly hawkish leanings”.

John Taylor – an economics professor at Stanford whose views “would fit with Republican views for a more rules-based Fed.” But, the report added, “his policy leanings — more aggressive rate increases and the stronger dollar that would result — would work against Trump’s pro-growth agenda.”

John Cochrane – another professor, from the University of Chicago with conservative leanings, whose “recent research has delved into more unorthodox topics, such as whether Fed policy rates and inflation could be positively related, i.e., that low policy rates may lead to low inflation and vice versa.”

That is from Jessica Dye at the FT, expect the list of names to evolve with time.

1 Tom Church February 16, 2017 at 7:45 pm

One thing to note – John Cochrane is full time at the Hoover Institution now.

2 Tom Church February 16, 2017 at 7:48 pm

And of course, John Taylor has been a senior fellow at the Hoover Institution for many years.

3 anonymous as usual February 16, 2017 at 8:52 pm

The Hoover “Institution” is a great place. The weather is nice, and everyone tells each other how wonderful they are. Unfortunately, , people there with little understanding of how out of touch intellectuals often seem are rarely on the road to rectifying this defect.

4 anonymous as usual February 16, 2017 at 10:27 pm

Plus the Hoover Institute has, for some of us above a certain age, a sort of vibe like the end of Its a Wonderful Life – we know that the bad part of Potterville actually occurred and that joyful tearful scene where everyone in town rushes into the front parlor with money for the poor Jimmy Stewart character after he has screamed like a madman at his poor raven-loving uncle and used unkind and loud and intolerant language against his own daughter for — happily playing a Christmas song (!) — was just a fiction. The bankers won, the town became no different than any other crime and vice-ridden town of the 70s, there was no rush by the people of town into the front parlor with money in their hands to give to the Jimmy Stewart character, and Bert and Ernie became and remained cynical cops who spent their bitter 70s retirement years wearing ugly clothes in Florida, and never really were the hail fellow well met guys of the ending fantasy notes of Its a Wonderful Life. It is nice to see what could have happened – but nobody reading these lines should expect that, at the end of a bad day in our own financially troubled lives, happy and gratitude-filled fellow townspeople will rush through the door ready to help us out with their hard-won stocks of cash. Now I believe in angels, and in happy endings, but not that way. The poor Hoover Institution is, in my world view, a beautiful and well-constructed real world version of what these wanting-to-be-happy days have constructed in defiance of the fact that people are gonna be people. Anyway, my favorite fact about the Hoover Institution is that there are, here in 2017, and solely because of it, literally hundreds of professors, former graduate students, and even former college students and other friends and acquaintances of Hoover Institution alumni who can say that they were taught by or were friends of a colleague of Kerensky’s. And in the real world of the 20th century, where Miskatonic U. was almost more true to the facts than a place like the Hoover Institution has ever been, every single one of those people with that one degree of connection to Kerensky have one degree of connection to an individual whose political misfortunes, had they been reversed, could have easily seen himself as the turning point to a better and different world where 20 to 40 million people would have not tragically died – one or more tragedies per death, remember the grieving survivors… – as a result of authoritarian violence. oremus invicem. On a brighter note, I used to live in a house that was built in the 40s – down the street lived one of the several hundred Americans who flourished back in that day as music teachers and who could say, with complete truthfulness, that their music teacher was a student of a student of one of the great composers of the Romantic Era. Well I have lots of friends with young children – many of them will outlive most people my age by a 100 years. I hope that, long from now, they will still remember the Romantic Era and the people who were fond of that era. Thanks for reading. (Why didn’t you tell me to bring my harmonica?)

5 anonymous as usual February 16, 2017 at 11:00 pm

Sorry I meant to post this on the Benedictus of Gounod (relevance really gets going at about the 450th word) or somewhere like that on Youtube, whence I would have humbly deleted it by Tuesday (in honor of the “for which I will gladly repay you on Tuesday” friend of Olive’s and Popeye’s). If I wasted your time I am sorry.

6 Meets February 16, 2017 at 7:51 pm

The market doesn’t seem to be fearing a hawkish pick

7 Ray Lopez February 16, 2017 at 8:01 pm

Re-read this post with the idea that money is everywhere and always neutral (changes in the money supply have no real effect) and then step back and say: “what are we so concerned about?”

For this reason I favor Scott Sumner’s NGDPLT. It’s crazy (a kind of crowd sourcing monetary policy framework) but no less sound (or no less bogus) that John Taylor’s Taylor’s Rule. Let’s try it!? If money is neutral–and the evidence shows short term it is (Bernanke’s 2002 FAVAR paper, first edition)–there’s no harm even if a chimpanzee is nominated to the Fed.

8 anonymous as usual February 16, 2017 at 8:53 pm

Reread some of the more insightful chapters of Fisher and Keynes.

9 anonymous as usual February 16, 2017 at 8:58 pm

“The Purchasing Power of Money”, Chapters IV, V, and VI. (Fisher). “The General Theory of Employment, Interest, and Money”, Chapter 12. Any incremental insights welcome, as is, I guess, uninformed invective, if sincere (just kidding about the last clause of this comment).

10 Borjigid February 16, 2017 at 10:39 pm

Ray, stick to telling us about your 16 year old monkey. Or whatever.

Its stays fresh in a way that your blathering about monetary neutrality does not.

11 Ray Lopez February 16, 2017 at 11:30 pm

You’ve been brainwashed, like the verbose anonymous as usual. But you can deprogram yourself, I’ve given you the key, read Bernanke’s FAVAR paper, it’s found on the web. It’s up to you whether you want to go through life with priors, like the communists and their scientific Marxism, or whether you wish to see reality. But your “Or whatever” shows the level of thought going through your pea brain. I’m in the 1%, and you’re still hoping to land your first job. Good luck with that, at least it will keep you off the welfare rolls.

12 Ray's girlfriend's pimp February 17, 2017 at 12:40 am

Where’s my g*dd*mn money, Ray?

13 anonymous as usual February 18, 2017 at 7:30 pm

Oremos invicem, Raimunde. Las palabras llegan un día a las manos del escritor paciente como bandadas de palomas (Don Colacho). Again, Keynes 12 and Fisher 4, 5, 6. Certainly Keynes was not as bright as advertised and Fisher, to his discredit, lacked reliable continuity in his observations and his common sense, but each of them, as thinkers, deserve better than uninformed invective (as do so many of us). Do not be fooled by slogans, not even your own! First three words were most important in this post.

14 anonymous as usual February 18, 2017 at 8:39 pm

What you see, my young friend, as verbosity others might see otherwise (words arrive when the patient writer wants them too, almost as if they were random flights of numerous doves). You know more about chess than I do, so there is that.

15 anonymous as usual February 18, 2017 at 10:57 pm

palomas — gaviotas. How happy one is to imagine someone one cares for being happy at the oceanside!!!! Conchas marinas – ozono – amistad – Let us not be fooled by our apparent successes in the maze of verbal analogies. This means something, we think, but more likely it does not mean a fraction of what we think it means – —- God loves us the way we are but loves us too much to willingly let us stay that way…. True or false? Vix e conspectu Sicliae Telluris in altum vela dabant laeti et spumas salis aere ruebant …. No, not false. 1968, October, 1974, September, 1977, summer, 2007, March. God loves us all. Sorry to tailor a comment for you, Ray: is that so wrong, to respond to your half a million words, (with a few dozen)?. Proverbs 8, Romans 8, and all of Philippians, Thanks. Raimonde, oremus invoice, amice (we can talk of Keynes and Fisher some other time….:) Proverbs 8, Romans 8, and all of Philippians, you will get there some day. (whether you read this or not – my guardian angel and your guardian angel are pals). July 1, 2017. Remember?

16 Bill February 16, 2017 at 8:20 pm

When it is time to appoint their own Fed governors, suddenly those candidates who are more conservative, and quick to raise rates, are less popular in a let er rip Trump model.

Sad, so sad.

But if you are willing to deregulate, you are golden.

17 carlospln February 16, 2017 at 9:31 pm

1) There’s no need to deregulate, when the Fed refuses to investigate & BE a regulator in the 1st place

2) I suspect the identity of the new Fed Chairperson-thingie will become irrelevant when it becomes a dept. under the Executive Branch [under Treasury Sec’y]

18 Christian Hansen February 16, 2017 at 9:52 pm

Trump is a real estate guy. My guess is Nicolás Maduro.

19 Ray Lopez February 16, 2017 at 11:32 pm

Trump would probably like a bit of inflation, as it helps real estate. But not only is money neutral, the last ten years have shown us central banks have very little power over nominal rates either.

20 Guinn February 17, 2017 at 7:08 am

…it’s so much fun speculating about the next Fed Chairmanship — and what’s your Oscar pick for Best Actor winner this month?

If you were running the biggest banking cartel in world history — what kind of top dog would you want to keep it going so successfully?

21 JC February 17, 2017 at 11:41 am

You forgot Suze Orman because Trump.

22 Barkley Rosser February 17, 2017 at 4:00 pm

Let’s see. In the early 1980s when Republican Reagan was president, he reappointed Democrat Paul Volcker when his term was up. When Democrat Bill Clinton was president he reappointed Republican Alan Greenspan when his term was up. When Democrat Barack Obama was president he reappointed Republican Ben Bernanke. Why is it so certain that Trump will go against precedent on this and not reappoint Janet Yellen? Has she not been doing a good job? In fact I would contend that not only has she been doing a good job, but that she is the best Fed Chair there ever has been. None of these suggested successors are remotely in her league.

Furthermore, the way things are going, Trump may well be begging her to stay come next January, even though now everybody simply assumes that he will replace her. Why should he, aside from the fact that he is an incompetent maniac?

23 Sam the Sham February 17, 2017 at 8:21 pm

I’d put Cochrane in Yellen’s league. He has a weird combination of hubris and humility (and independent-mindedness) that would serve the Fed well. Yellen has not been doing a bad job from what I’ve seen – she knows that there are things she doesn’t know (humility) and plays it safe (a bit of hubris thinking the status quo is ok).

I would not be disappointed if Yellen were renewed, but I’d love to watch Krugman’s head explode in real time if Cochrane were appointed. Some things are worth burning civilization down for.

24 Jackson Layers February 18, 2017 at 3:43 am

It’s hard to pick between these candidates, so I will not even try. I believe market is pretty much prepared. I always prepare myself at least. I find it easier under OctaFX because they are wonderful having low spreads from 0.1 pips to high leverage up to 1.500 while there is also zero balance protection, swap free account and much more, it’s all epic and helps me working out well regardless of the situation which makes me feel pretty good.

Comments on this entry are closed.

Previous post:

Next post: