History Will Judge ‘Donald Trump’s Fed’


Via Bloomberg’s Editorial Board

Even more than before, President Donald Trump now has the chance to entirely reshape the Federal Reserve. Janet Yellen’s term as chair ends early next year, and her deputy, Stanley Fischer, has just resigned, citing personal reasons. Soon Trump will be able to appoint a new person to the top job and three other positions on the seven-member board — not counting the one he’s already given to Randy Quarles.

Fischer’s departure, coming months earlier than expected, is a serious loss. His combination of intellect, experience and collegiality is virtually irreplaceable.

One of the world’s most distinguished macroeconomists, he conducted influential research while a professor at MIT, co-authored standard texts, and was a revered teacher — among his former students are Mario Draghi, head of the European Central Bank, and former Fed chief Ben Bernanke. He held the top economics jobs at both the World Bank and the International Monetary Fund, was a vice chairman of Citigroup, and between 2005 and 2013 was the notably successful head of Israel’s central bank.

luminary among central bankers, Fischer was amply qualified to run the Fed. That he was content to serve as No. 2, acting as Yellen’s close ally, attests to his lack of vanity. His hallmarks as a communicator of the Fed’s thinking, a role he recognized as crucial, were clarity and open-mindedness. All these traits will be sorely missed.

The case for reappointing Yellen, which Trump hasn’t yet ruled out, just got stronger. Fischer’s exit raises the premium on continuity, expertise and experience, and the current Fed chair embodies all three.

History’s verdict on presidents rests more than they might wish on the competence of the Fed during their time in the White House. When it comes to those other Fed appointments, the president would be smart to reflect on what made Fischer such a good choice and strive, for his own sake as well as everybody else’s, to choose as wisely.




3 thoughts on “History Will Judge ‘Donald Trump’s Fed’

  1. The danger is that by filling the Fed with a heap of unqualified FOT (friends of Trump) the likes of Yellen, Fischer, Bernanke will be able to skip away scot-free from the mess that they’ve created and it will take a lot, lot more figurative and actual funerals before the pseudoscience of economics actually changes…

  2. A President has 4 the potential for 4 meaningful impacts during his/her tenure. First is foreign affairs..we have seen this with No. Korea and Afghanistan. Compared to legislative haggling and the tedious process of procuring some consensus it is amazing how quickly geopolitical forces can be addressed.
    The second is the tone he/she adopts with the American people.The President has virtually unlimited access to the American people and how confidently views and command of various situations are projected are directly reflected in approval ratings and confidence in and of him.
    Third is the Supreme Court..some Presidents get a wide open shot at this one..others get nothing.
    The appointment process is in many ways like getting legislation passed..it passes thru the gaunlt of Congress. Heaven help you there.
    The last is the Fed..Bernanke reflected very much the “just make it better” attitude of Bush..Yellen was the perfect fit for a “decide and move tomorrow…or the day after..” of Obama. My take is that Trump has never met a loan or a debt limit he didn’t like. His entire business edifice was and is constructed on leverage. He will do the same thing when it comes to the Fed. His Fed, when the time comes, will have the loosest monetary policy in cur history. We’ll see great market moves (up and down) and inflation come hell or high water. This guy is trouble..and he likes it!

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