By Roman King| WASHINGTON
In the first significant structural change to the Federal Reserve in years, Donald Trump is expected to nominate Randal Quarles, head of the private investment firm called the Cynosure Group and former Undersecretary of the Treasury under George W. Bush, and Marvin Goodfriend, member of the Manhattan Institute’s Shadow Open Market Committee, to two of the three vacancies on the Federal Reserve Board of Governors. According to investors and speculators, the nominees’ grounding in the financial markets is “refreshing,” and gives an interesting contrast to current Chairman Janet Yellen, “…probably the most left-wing Fed chair we’ve ever had…,” according to Christopher Whalen, head of Whalen Global Advisors and longtime financial analyst.
According to Brian Gardner, managing director at Keefe, Bruyette & Woods, the move represents the Trump administration’s push to make rules friendlier for community and regional banks, instead of Wall Street institutions. “I don’t think they’re overly hawkish, but probably slightly more than what is represented on the board right now,” said Gardner of Quarles and Goodfriend.
The expected nominations come as the Federal Reserve prepares to raise interest rates and roll of its $4.5 trillion dollar bond holdings, referred to as the Fed’s ‘balance sheet’, a policy that Goodfriend is openly “skeptical” of. The two nominees have also been put on record in opposition of the quantitative easing policies the Fed has used in recent years to spark the economy. If nothing else can be taken out of the expected nominations, it is that the Fed will be, for the first time since the Recession, not of one mind. The Trump administration’s attempts to roll back the Federal Reserve will certainly not be without challenge.