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Abu Dhabi, UAEFriday 22 June 2018

You're hired! Shades of 'Apprentice' in Trump's hunt for next Fed chief

US president appears to be channelling his hit TV show in crucial economic appointment

Donald Trump poses for photographers on January 16, 2015 during a promotional tour for The Celebrity Apprentice television series hosted by him. Chris Pizzello / Invision / AP
Donald Trump poses for photographers on January 16, 2015 during a promotional tour for The Celebrity Apprentice television series hosted by him. Chris Pizzello / Invision / AP

The video opens with an establishing shot showing lighting rigs, microphones and aides clustered behind the scenes.

Then the picture cuts to our host, President Donald J Trump.

“People are anxiously awaiting my decision as to who the next head of the Fed will be,” he says. “I’ll be announcing it some time next week.

“It will be a person who hopefully will do a fantastic job.”

The video released on Friday is not so much a traditional presidential address as a trailer for Mr Trump’s latest reality show: The Apprentice — Federal Reserve edition.

After asking guests at his golf club for their take on his cabinet appointments and publicly listing the candidates for his supreme court nomination – before asking two finalists to travel to Washington for a prime-time reveal – Mr Trump is once again using skills from his television career as he prepares to announce one of the most significant appointments at his disposal.

Where previous administrations have sought to minimise speculation and frequently plumped for the incumbent to avoid disrupting markets, Mr Trump has tried to generate a sense of suspense as he decides who to pick as head of the Federal Reserve.

In recent weeks he has used interviews to float five names and hint at his favourites as he kept up a running commentary on progress.

The appointment could have huge implications for the US economy as it continues its upward progress after the great recession, and for the rest of the world.

The central bank’s role is to manage the world’s largest economy by adjusting interest rates: down to generate investment, growth and jobs, or up if it risks overheating.

The front runners are Jerome Powell, a Fed governor, and John Taylor, a Stanford economist who was critical of the bank’s role in creating the housing boom that triggered the 2007 collapse.

“Most people are saying it’s down to two — Mr Taylor and Mr Powell,” Mr Trump said in a recent interview with Fox Business Network.

“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."

Ms Yellen, whose first term as chairwoman ends in February, has been praised for her handling of the economy, not least by the president who has talked up rising markets and falling unemployment.

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Every chairman (and they were all men before Ms Yellen) since the Second World War has been renominated for a second term but Mr Trump has indicated he wants to shake things up.

Gary Cohn, Mr Trump’s chief economic adviser as director of the National Economic Council, and Kevin Warsh, a former Fed governor, complete the slate.

Last week the President tried to coax Republican senators into the debate. He asked for a show of hands in support of either Mr Taylor or Mr Powell, much to the disgust of some of those present.

“I don’t think that’s a very good way to pick a Fed chair, so I declined to participate,” said Bob Corker, the Tennessee senator who has been locked in a war of words with Mr Trump in recent weeks.

The candidates offer divergent views on how best to manage the US economy, presenting a stark choice between status quo and something more radical.

While Ms Yellen would offer continuity, conservatives are pushing for Mr Taylor. He cuts more of an outsider figure, arguing that the economy would grow faster with less Fed interference and pushing to phase out its recession stimulus package more rapidly.

However, some US media outlets are reporting that Mr Trump will plump for Mr Powell. He supports a more gradual reduction of the Fed’s efforts to stimulate growth. He has also voted in favour of all Fed decisions for the past five years, making him a second status quo candidate.

He does have one advantage over Ms Yellen as far as the president is concerned. He is a Republican.

Ever the showman, Mr Trump has managed to drop the issue into several of his recent TV appearances as he tries to generate interest.

Last week he canvassed the opinion of Lou Dobbs, a popular and populist Fox Business Network host, in the middle of a TV interview.

“Tell me who your preference is,” he said, pressing Mr Dobbs until he rather reluctantly plumped for Ms Yellen.

Mr Trump said he had been impressed by her performance but dropped a strong hint he was in favour of a change at the top.

"You like to make your own mark which is maybe one of the things she's got a little bit against her, but I think she is terrific," he said.

The suspense should end soon. The White House says Mr Trump will announce his decision before leaving on Friday for a 12-day trip to Asia that includes China, Vietnam, Japan, the Philippines and South Korea.