(Bloomberg)—A president who once made a television career out of firing people knows something about boardroom drama. So it is with the top job at the Federal Reserve, with markets whipsawing on reports and innuendo ahead of a final decision and announcement in the next two weeks.
Reports suggested Federal Reserve Governor Jerome Powell was in front, then Stanford economist John Taylor, and maybe Powell and Taylor as a package deal somehow. And then the mere reporting that current Fed Chair Janet Yellen was physically at the White House a day after her interview suggested... something?
President Donald Trump, ever the showman, was asked directly by Fox Business Network to clear it all up. He decided not to. “Most people are saying it’s down to two -- Mr. Taylor and Mr. Powell. I also met with Janet Yellen, who I like a lot, I really like her a lot. So I have three people that I’m looking at, and there are a couple of others. I’d say I will make my decision very shortly." Trump’s top economic adviser Gary Cohn and former Fed Governor Kevin Warsh are also said to be on the short list.
So how’s the news going to come? As the president loves to say to almost all questions of consequence: "We’ll see." With this White House, there’s not exactly a pattern.
With most administrations, you’d get an elaborate ceremony filled with pomp, circumstance and a winding speech about the future of the Republic. That could happen - it’s what the president did in rolling out Supreme Court nominee Neil Gorsuch. Don’t be surprised if there’s a swerve, though, toward something more direct. Trump told the world he’d fired Reince Priebus and hired John Kelly as chief of staff in three tweets across 11 minutes. HHS Secretary Tom Price, meanwhile, was ousted in a three-sentence statement from the press secretary.
Trump has said he’ll make an announcement before leaving for Asia on Nov. 3.
Whatever differences the House may have with the Senate’s budget, President Trump has made it abundantly clear he’s not interested. Trump told House lawmakers on a call Sunday in no uncertain terms they should pass the Senate’s budget without changes.
And the House, either Wednesday or Thursday, is expected to do just that. If it’s Thursday, the vote would probably be during market hours, as last votes of the week are expected by 3pm on Oct. 26. The dollar rose, Treasuries fell, U.S. stocks rally extended on the Senate’s budget adoption last week, as a positive sign for tax reform.
The budget is critical to this process because, for all the talk about bipartisanship, it would set up reconciliation procedures that would allow Republicans to pass their tax legislation without having to worry about a Democratic filibuster. Note that Trump has no formal role in this process, as budgets don’t get signed into law. Once the House and Senate agree on the same language, it’s done.
Trump will speak with Senate Republicans Tuesday at the Capitol Evercore raised tax overhaul odds to 70%; likely finalized 1Q 2018 Debate over treatment of pass-through businesses shows why an overhaul is hard
The Senate plans a procedural vote later today on a House-passed $36.5b aid package to deliver assistance to hurricane-ravaged Puerto Rico, Fla. and Texas and areas hit by wildfires in the west. The bill, H.R. 2266, includes $16b in debt relief for the National Flood Insurance Program.
Several lawmakers are pushing for additional aid, and flood insurance still needs to be reauthorized. However, it’s unlikely to be delayed, as the flood insurance program itself may exhaust its available funding this week without congressional action.
Rather than put more into this tranche, delaying its passage, lawmakers have begun eyeing a possible as-yet-unwritten third aid supplemental in November.
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