In looking past Ms. Yellen, Mr. Trump would be breaking with longstanding precedent. Every Fed chairman in modern history who completed a first four-year term was nominated for a second. The last three Fed chairmen were nominated for new terms by a president of the opposite party. And Mr. Trump has praised Ms. Yellen’s performance: During her four years, unemployment has fallen sharply, inflation has remained low and the economy is growing.
“You like to make your own mark,” Mr. Trump said last week, by way of explanation.
In choosing Mr. Powell, however, Mr. Trump would be resisting pressure by conservatives to make a larger mark on the Fed’s management of the economy. Many conservatives, including Vice President Mike Pence, favored the selection of John B. Taylor, a Stanford economist who has been an outspoken critic of the Fed’s monetary policy.
Mr. Powell, by contrast, has voted for every Fed policy decision since 2012, although he expressed some reservations in internal debates about the extent of those efforts. In recent years, he has backed the methodical unwinding of the Fed’s stimulus campaign, which involved purchasing $4 trillion worth of Treasuries and mortgage-backed securities to help the economy recover from the 2008 financial crisis.
Fed officials are often labeled hawks if they favor higher interest rates to control inflation, or doves if they want to keep rates low to promote job growth. Richard Fisher, a former president of the Federal Reserve Bank of Dallas, who worked with Mr. Powell at the Fed, said Mr. Powell “is neither a hawk nor a dove.”
“I used to say that we all want to be wise owls,” he added, “and I think that he fits that category very well.”
Mr. Fisher said Mr. Powell was moderate to a fault. “I’ve tried to get him to drink more than two glasses of wine at dinner, and he will not do it,” he said.
A survey of 144 investors conducted by Evercore ISI found that they expected that Mr. Powell would push rates modestly higher than Ms. Yellen over time.
Mr. Powell also has sought a middle ground on the contentious debate over financial regulation. Mr. Trump and congressional Republicans argue that excessive regulation is restraining economic growth. At a Senate hearing in June, Mr. Powell agreed that there was room to improve regulation, but he described the Trump administration’s proposals as a “mixed bag,” adding that he opposed some of the specific proposals.
Describing an effort already underway at the Fed, he said, “The whole idea is to preserve the significant core reforms that were made but to go back and clean up our work.”
Mr. Powell would require Senate confirmation, and his views, particularly on regulation, could draw opposition from some conservatives in the Senate, 21 of whom voted against his confirmation as a Fed governor in 2014. Two Republicans on the Senate banking committee, which will consider the nomination, had previously raised concerns about Mr. Powell: Senator Tim Scott of South Carolina and Senator Patrick J. Toomey of Pennsylvania.
If nominated and confirmed, Mr. Powell would be the first Fed chair in four decades without an economics degree. He brings a background in financial markets, a contrast with Ms. Yellen and her predecessor, Ben S. Bernanke. People who have worked with Mr. Powell say he studied economics assiduously after joining the Fed, gathering stacks of papers on the questions of the day, then reading and discussing the findings with colleagues.
“I think it’s far more important to understand and appreciate high-quality economic analysis than it is to have a Ph.D.,” said Kim Schoenholtz, a professor of economics at New York University.
He noted that most Treasury secretaries had not held degrees in economics. “What distinguishes the most effective secretaries is skill at bringing in talented personnel and appreciation for the value of informed economic analyses,” he said.
Jon Faust, a professor of economics at Johns Hopkins University who worked with Mr. Powell at the Fed, said Mr. Powell had endeavored to understand monetary policy and had demonstrated a strong grasp of the subject. But Mr. Faust said it might be particularly important to have a trained economist as chairman if there was another recession.
“If the economy broadly behaves, I don’t think it’ll be of great consequence,” Mr. Faust said. “If we were to face another period where you need innovative and creative leadership, Jay has a lot of skills, and it could still go O.K., but you’d like to add to those skills a lifetime of studying monetary policy.”
Mr. Powell, 64, is a Washington native who has spent most of his life in a mix of public and private roles. He studied politics at Princeton University, then earned a law degree from Georgetown University before embarking on a career in investment banking in New York.
In 1990, he returned to Washington to work for his former boss, Treasury Secretary Nicholas Brady, as under secretary for finance. When Salomon Brothers was caught manipulating the market in Treasuries, Mr. Powell, vacationing on Cape Cod, spent a long August weekend on the phone arranging for top managers to resign and for Warren E. Buffett to be chairman of the company’s board.
Under pressure to account for the shortcomings in regulation, Mr. Powell told a congressional committee in 1991, “There is no question that it can be improved, and improve it we will.”
Mr. Powell joined the private equity firm Carlyle Group in 1997 and earned a fortune. His most recent financial disclosure showed a net worth of as much as $55 million. In 2005, he left the firm to focus on fiscal policy as a scholar at the Bipartisan Policy Center.
He attracted the attention of the Obama administration in 2011 for his work behind the scenes to persuade congressional Republicans to raise the debt ceiling. The next year, President Barack Obama nominated Mr. Powell to the Fed alongside a Democrat, the Harvard economist Jeremy Stein, in a package deal that was meant to attract bipartisan support.
Mr. Stein returned to his life as a Harvard professor after two years; Mr. Powell decided he liked working at the Fed, and so he stayed.
Trump Is Expected to Name Jerome Powell as Next Fed Chairman – New York Times