The Powell pick also follows Trump's selection in July of Randal Quarles, a former Treasury official under George W. Bush, to be the Fed's top official for banking regulation and supervision. Quarles aims to roll back some of the post-crisis banking rules passed under Barack Obama. But neither he nor Powell are seen as wanting to dismantle core reforms.
That pragmatism augers well for those hoping Trump will keep nominating mainstream candidates for the central bank, according to Stephen Stanley, chief economist at Amherst Pierpont Securities.
"They are looking for serious people and they're not necessarily looking for people who will fundamentally shake the foundations of the Fed," he said. "They know the Fed is important to the performance of the economy and they're obviously very focused on that."
It could have been very different. Trump's former chief strategist, Steve Bannon, said in February the new administration took office with the goal of "deconstruction of the administrative state."
Keeping to that script, the president tapped Scott Pruitt, a climate change skeptic, to head the Environmental Protection Agency; Betsy DeVos, known for her advocacy of charter and private schools, to the Department of Education; and Rex Tillerson, an oil executive with no diplomatic experience, as secretary of state.
For the Fed, candidates Trump considered reportedly included John Allison, who has favored dismantling the central bank. If Allison was never a serious candidate, Stanford University economist John Taylor and former Fed Governor Kevin Warsh, were. Both were admired by Republican lawmakers who wanted higher interest rates and less freedom of maneuver for Fed policy makers. Taylor supports formally adopting a mathematical equation to guide interest-rate decisions, while Warsh has agitated against "groupthink" at the Fed.
Trump might yet appoint less orthodox outsiders to some of the remaining openings, but with a moderate in the chair, that may even be a positive development, Matus said.
"In the past you've had Federal Reserve governors who were much more aggressive at dissenting, and to be honest I don't think that was the worst thing," Matus said. "You knew all the views were being considered and evaluated."
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