Since Janet L. Yellen became the Federal Reserve’s chairwoman in February 2014, unemployment in the United States has steadily declined while inflation has remained low. Few Fed chairmen have achieved comparable success.
Yet President Trump, who is scheduled to meet Ms. Yellen on Thursday, says he is still considering whether to nominate her for a second four-year term, and key White House aides are pressing for her to be replaced.
Ms. Yellen’s peril reflects the polarization of American politics. The three previous Fed chairs were reappointed at least once by a president of the opposite political party, but some Republicans are eager to oust Ms. Yellen, a registered Democrat who has strongly defended post-crisis financial regulations.
She may also become a victim of her own success. Steady economic growth and the tranquillity of financial markets have emboldened some critics, who see an opportune moment for a transition to new leadership.
But Mr. Trump also faces warnings that replacing Ms. Yellen is an unnecessary risk to the economic growth the president has repeatedly pointed to as a primary success of his young administration.
Yet, Mr. Trump is considering four candidates to replace Ms. Yellen. On that short list: Gary D. Cohn, the president’s chief economic adviser; Jerome H. Powell, the only Republican on the Fed’s board of governors; John B. Taylor, a Stanford University economist who has criticized the Fed for raising interest rates too slowly; and Kevin Warsh, a former Fed governor and a fellow at the Hoover Institution.
Mr. Trump wants to loosen financial regulations, which he regards as an impediment to economic growth. Ms. Yellen, who played a key role implementing the new banking rules after the 2008 crisis, has acknowledged room for improvement. But in a high-profile speech in August, she also issued a warning against going too far.
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