WSJ endorses Kevin Warsh, John Taylor for Federal Reserve chairmanship

The market is betting that Federal Reserve Governor Jerome Powell is the heavy favorite to succeed Janet Yellen at the United States central bank. But one national newspaper is endorsing former Fed Governor Kevin Warsh and Stanford economist John Taylor.

The Wall Street Journal‘s Editorial Board published an op-ed on Thursday entitled “A Fed for a Growth Economy.”

The newspaper suggests that Taylor would bring academic credibility to the Federal Open Market Committee (FOMC), while Warsh would bring some new blood and ideas to the central bank. That said, it looks like the WSJ is leaning more towards Warsh.

Here is what the editorial board writes:

“This crisis experience is a major recommendation for the Fed chair because we may face financial turbulence as the Fed raises rates and unwinds its bond portfolio. As Mr. Warsh warned when he left the central bank in 2011, the Fed has pushed investors into riskier assets with uncertain consequences. Who knows what might show up naked as the tide recedes? Mr. Warsh also has credibility with the leading central bankers in China, Europe and Japan that would be essential in any new currency or financial panic.

“More even than Supreme Court Justices, predicting the performance of a Fed Chairman is difficult. But the best guides are experience and bedrock economic principles. Mr. Trump and the country will do better with a fresh voice who knows how to manage in a crisis and believes that faster economic growth without inflation is possible and necessary.”

At this time, Treasury Secretary Steven Mnuchin is urging President Donald Trump to tap Powell, the president’s opponents want Yellen to stay on, the media favor Taylor and the market also appears to want Powell.

Here is what the market is betting, according to PredictIt: