President Donald Trump has nominated Federal Reserve Governor Jerome "Jay" Powell to be the next chairman of the Federal Reserve, The Wall Street Journal reported on Wednesday, citing a person familiar with the matter. Powell would succeed current Fed Chair Janet Yellen, whose term ends in February.
The White House did not immediately return a request for comment.
Powell, 64, is currently a member of the Federal Reserve Board of Governors and was appointed by President Barack Obama in 2012. He served in the Treasury Department under President George H.W. Bush and was a partner at The Carlyle Group (CG - Get Report) from 1997 to 2005.
A Fed governor since 2012, Powell is a Republican with deep roots in the party's establishment and the financial industry, The New York Times reports. He has supported the Fed's current approach to monetary policy and financial regulation, meaning investors should sleep well at night with him at the wheel.
Outside of Yellen, he provides "the highest degree of continuity to current policy," wrote Deutsche Bank chief economist Peter Hooper in a recent note. He has five years of experience working inside the Fed on macroeconomic, monetary and regulatory policy. While he is not a PhD-trained economist, "he has learned the trade well," Hooper wrote. He is a lawyer by training.
Powell "clearly has a more deregulatory bent" than Yellen, Capital Alpha analyst Ian Katz wrote in a recent note, but he isn't an extremist. He said in a June hearing before Congress that the Fed should provide banks with more transparency on stress tests but does not support reducing risk-based capital requirements. He has also defended the Orderly Liquidation Authority, a mechanism under Dodd-Frank to wind down collapsing financial institutions.
Powell was one of five finalists under consideration for the Fed chair spot, alongside Yellen, Stanford University economist John Taylor, former Fed Governor Kevin Warsh and National Economic Director Gary Cohn.
Trump's decision to nominate Powell should put at ease onlookers concerned he might instead opt for a more unconventional pick or someone who has openly pushed against the agency he or she now heads, as he did with Scott Pruitt as the head of the EPA or Betsy DeVos to head the Education Department.
"Governor Powell is viewed as a solid centrist who is ever-so-slightly more hawkish than Chair Yellen," said Compass Point analyst Isaac Boltansky in a recent note. "Given his voting record and public comments to date, we would expect the Fed's normalization trajectory to be pulled forward only modestly [under Powell.]"