Leadership Changes Loom at the Fed

The Trump administration is starting to consider a replacement for US Federal Reserve Chair Janet Yellen after her term expires. This is only one potential leadership change in what could be a wave of turnover ahead for the institution.

With three open seats on the Fed’s Board of Governors and more turnover likely, there are many moving parts to the coming transition. But in the past, nominations for the board’s chair have been made several months before the current chair’s term expires. Based on this precedent, we expect the nomination in the next few months.


Several prominent economic and political figures have been mentioned as potential successors to Yellen, each with a perceived position on the policy spectrum (Display). It’s impossible to know whom the president will eventually choose—and a dark-horse candidate could certainly emerge. This list is by no means comprehensive, but it does cover several of the candidates whose names have been commonly mentioned as potential chairs starting in 2018.

JANET YELLEN. President Trump could simply choose to reappoint Yellen as chair, as has generally happened with past Fed chairs. This option might appeal to the president because the economy and the financial markets are both performing well, giving him incentive not to rock the boat. Trump was quite critical of the Yellen Fed during his campaign, but he has been much more positive in his assessment of her tenure since he assumed office. In fact, in an interview earlier this year, Trump indicated that she might still be reappointed. Yellen’s academic and policy credentials are unimpeachable, and financial markets would likely be happy with this choice: markets prize stability, and also view Yellen as dovish on interest rates.

JEROME POWELL. A current governor, Powell would be a logical choice for chair if the president wants to preserve continuity but also wants to make his own nomination. Powell has background in both the Fed and the executive branch, including service as assistant secretary and undersecretary of the Treasury Department under President George H. W. Bush. Powell has served on the board since 2012, and he’s currently its only Republican, which may enhance his appeal to the president and ease his confirmation process.