It should go without saying that one of the reasons markets are so damn fixated on whether Gary Cohn will or won’t resign from the Trump administration is that he’s been identified as a candidate for Janet Yellen’s job.
So the implication is that if he quits on Trump, it creates more uncertainty around the future leadership of the Fed.
And that uncertainty couldn’t possibly come at a worse time, as the next Fed chair will be tasked with presiding over the unwind of the greatest experiment in the history of monetary policy at a time when political uncertainty has never been higher and asset prices have never been more stretched.
Well, with that as the context, consider the following series of tweets sent out earlier today by Narayana Kocherlakota, who has now put Yellen on notice that if she accepts a reappointment, she will likely find herself on the wrong side of history…
Of course Yellen may well find herself on the wrong side of history anyway, if the bubbles she’s helped to blow end up bursting and creating some kind of horrific collapse, but I guess the point is: why add even more reputational risk?
And besides, Yellen should already be predisposed to declining a reappointment from Trump because he keeps trying to take credit for the massive stock market bubble she worked so goddamn hard to create.