Janet Yellen may well be America's most powerful woman, given her ability to send trillions of dollars surging through markets worldwide with a mere tip of her hand that indicates how healthy or weak her view of the U.S. economy is.
On Thursday, Yellen interviewed with President Trump for a second stint as Federal Reserve chair. While their encounter was not on the president's public schedule, a White House spokesperson confirmed her meeting with the president.
The mere fact that the meeting is happening is notable given how harshly Yellen was treated by Mr. Trump during the campaign. He blasted her for making it "impossible for bankers to function," accused her of being too political, and suggested he'd replace her.
Yellen is the first woman to hold the job, and was appointed to the position by then-President Obama in 2013. Given the extraordinary powers of the office, the Federal Reserve position is meant to be apolitical. Yellen's term ends in February, at which point she will either be reappointed or replaced.
Particularly for a president who frequently lauds the latest stock market surge as proof of his positive influence rather than as an extension of the nearly nine-year bull market, the selection of the next Fed Chair will be key because that individual controls monetary policy, which in turn impacts the strength of the dollar and acts as an incentive for money to flow into asset classes including stocks.
Despite his criticism of Yellen's low interest rate policy during the campaign, which he argued distorted the markets, Mr. Trump appears to have had a change of heart on that position. He now says he favors raising the interest rates. Yellen did twice raise the Fed's benchmark interest rate, and there is an expectation that she'll raise the benchmark rate again in December. The rates have been unusually low since 2008 financial crisis, in order to encourage borrowing.
Stanford University professor John Taylor is the leading candidate among conservatives who believe interest rates should go higher. He met with Mr. Trump and Vice President Pence last week.
Treasury Secretarysat in on the interview with former Fed governor Kevin Warsh at the end of September. Warsh is also expected to be more hawkish.
Earlier this week in the White House Rose Garden, Mr. Trump said he was a fan of all five of the candidates under consideration. Gary Cohn, his National Economic Council Director, is still among them but is.