Picking up on a story reported previously by both the WSJ and Politico - oh and Bloomberg itself - Bloomberg writes that Trump’s advisers have delivered the final list of candidates they recommending as candidates to lead the Fed and have ended the search. While only a "small handful" of the president’s closest advisers have seen the final list of names, it did not prevent them from leaking it, and the result is what we already know from previous leaks namely that in addition to Yellen, Trump is considering Gary Cohn, Kevin Warsh and current Fed governor Jerome Powell, who as Politico reported overnight, is said to have the blessing of Steven Mnuchin.
Also confirming what the WSJ reported previously, Trump's chief economic advisor Gary Cohn - himself under consideration - has recused himself from the selection process.
In fact, the only incremental news in the latest report seems to be that while Janet Yellen remains under consideration, "few, if any, of Trump’s inner circle are advocating for her re-appointment."
Furthermore, we can cross out economist Glenn Hubbard and U.S. Bancorp Chairman Richard Davis, both of whom have been floated as possible candidates, although Trump has no intention of interviewing them. A potential wildcard is Stanford economist John Taylor, a favorite of fiscal conservatives, who is also said to be under consideration.
It has also been previously reported that Trump has spoken to Yellen, Cohn, Warsh and Powell about the Fed post, although there is no frontrunner at the moment.
According to Bloomberg, "the latest developments show that Trump is closer to making a final selection than previously known." Last Friday, Trump said that he is "two or three weeks away from announcing his nominee" for the post overseeing the nation’s central bank.
Meanwhile, speaking at the Vanity Fair New Establishment Summit on Tuesday in Los Angeles, Jeffrey Gundlach - who accurately predicted Trump's presidency - predicted that Neel Kashkari would be picked as next Fed chair. "I actually have a very non-consensus point of view. I think it's going to be Neel Kashkari... He happens to be the most easy money guy that's in the Federal Reserve system today and that's why he may win."
The Bond King said that Trump needs someone who will keep rates low in order to keep his populist reputation and help his base voters and that's why he'll pick Kashkari. "A stronger dollar is not good for achieving that agenda," he said.
Gundlach also is confident that Yellen would not get reappointed: "I
think there is no chance that she wants to be chairwoman, nor do I think
the president wants her to be," said the manager of $109 billion.
Judging by the latest PredictIt odds, if Gundlach is right, and if he is willing to bet some money on it, he could make a killing, as Kashkari does not even have a contract. As to the current ranking, Warsh remains in top spot with 38% odds, although following today's Politico news, Powell surged to second place with 31% odds, and now following the Bloomberg report, John Taylor finds himself in third spot with 20% odds, above both Gary Cohn in 4th and Janet Yellen who has tumbled to 5th with just 13% odds of being reappointed.