Economist Mark Schmerlin, one of nearly 12 reported candidates for the Federal Reserve Chair, said Thursday he was interested in work and thought aggressive interest rate cuts were appropriate.
Schmerlin, former senior economist for then-President George W. Bush, told CNBC that lowering the Fed’s key rate would now be an easy decision.
The current yield structure, combined with labor market debilitating and stable inflation, shows that “a 50 basis point cut can be easily performed…without confusion. The basis point equals 0.01%, so 50 basis points is half the point.
With the widespread openness towards the success of current Chairman Jerome Powell, Schmerlin’s position on the rate has at least placed him in command with President Donald Trump. The president advocates a reduction of up to 3 percent points, and the Powell-led Federal Open Market Committee has changed its benchmark fund ratio since its last cut in December 2024.
As far as nomination sweepstakes go, Sumerlin, now the managing partner of EvenFlow Macro, confirmed he was contacted by the White House last week. He said he is close friends with Treasury Secretary Scott Bescent, who has played a leading role in the search for the next chair, and that the two have been discussing monetary policy “for probably 12 years.”
“Last Wednesday, I said there was a list (and) I was going to work on it, about as much as I know now,” he said. “We’re waiting for more guidance on where we’re going from here.”
Schmerlin showed he was interested in the nomination as long as certain conditions were met.
“If it’s a Fed chair, I think it’s an important mission for the world. You have to be happy to do that,” he said. “I have never met the president before, and it will depend on us looking into the eyes.”
Schmerlin highlighted the importance of Fed Independence. What came into question has taken the historically unprecedented step of Trump publicly and harshly criticizing Powell and his fellow policymakers. He is called Powell and “loser” and “silly” and criticizes FOMC for being satisfied.
“You have to walk every day and get involved in it knowing you’re doing the best job you can for Americans, and you get criticism and get ready to deal with it,” Schmerlin said. “Ideally, you’d want to go knowing that you’re in sync. Synchronize and it’s part of the process of trying to understand that.”
In addition to Schmalin, other candidates include current governors Michelle Bowman and Christopher Waller, National Economic Council director Kevin Hassett, former governor Kevin Wahsh, and about half a dozen others.
