Here’s the Shortlist for New Fed Chair. But Trump Loves a Good Surprise.

Trump advisors are already working on appointments to his cabinet and independent regulatory agencies. That’s a good thing for two reasons.

The first is that it actually does take time to work up a list of loyal and capable individuals for key appointments. There are over 8,000 positions listed in the Plum Book (a directory of appointive positions in the federal government). These are the positions that a president gets to fill without regard to civil service or competitive bidding. Probably 3,000 are critical, but that’s still a lot of names to identify and recruit. It’s not something you can do in the 90 days between the election and the inauguration; you need to start at least a year in advance.

The second reason is that Trump is awful at this process. He bungled it badly in 2016, which is why the Deep State (as structured by Obama) remained in place to torment Trump during his entire term in office. Trump did not drain the swamp. The swamp creatures ate him alive.

Numerous groups are now working together to come up with the best names to prevent a repeat of the 2016 failures. Of course, some appointments are more important than others. One of the most important is the Chair of the Federal Reserve board.

Jay Powell is the current Chair. His term expires in early 2026, and he will almost certainly not be reappointed. This article looks at the shortlist of names being touted for the role.

The names listed are Art Laffer (an advisor to President Reagan and inventor of the Laffer Curve), Kevin Hassett (former chairman of Trump’s Council of Economic Advisors), and Kevin Warsh (a former Fed Governor).

I know Art Laffer personally. He’s brilliant and creative but a bit of a one-trick pony who talks almost exclusively about tax cuts. That’s not the Fed Chair’s job. Laffer is also not particularly strong on international economics.

Hassett is a solid choice but too wedded to mainstream economics and the neo-Keynesian consensus.

Warsh is the best choice among the three. He has solid economic credentials and Fed experience but he’s also a pragmatic and out-of-the-box thinker on key issues.

Of course, this shortlist is all just part of the Washington game of trial balloons. You put names out there to see if they draw support or criticism (and from whom) before deciding on the next steps.

Importantly, Trump is a showman and loves a good surprise. Don’t be surprised if he ignores this list and chooses someone not on anyone’s radar screen.

My favorite would be Judy Shelton. She’s a brilliant economist and a strong advocate of using gold as a reference point in monetary policy. She was nominated by Trump for a seat on the Fed board, but her nomination was derailed by Senate swamp creatures led by Mitch McConnell.

Mitch will be gone soon. That might open the door for Shelton as Chair. As I said, Trump loves a surprise.

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