WASHINGTON—President Donald Trump is unlikely to nominate Gary Cohn, his top economic adviser, as the next Federal Reserve chairman, according to people familiar with the president’s thinking, adding to the uncertainty over the U.S. central bank’s leadership and policies next year.

Mr. Trump told The Wall Street Journal in July that he was considering Mr. Cohn as a potential successor to Fed Chairwoman Janet Yellen, whose term as central bank chief expires in early February.

The change in thinking comes at a time of great uncertainty over the top ranks of the world’s most important central bank. Fed Vice Chairman Stanley Fischersaid Wednesday he will resign in mid-October for personal reasons, adding another vacancy to the three others on the powerful seven-member Fed board of governors. His departure accelerates Mr. Trump’s opportunity to put his stamp on the central bank.

Candidate Trump was critical of the central bank and Ms. Yellen last year, publicly chiding her during the campaign for keeping interest rates too low, which Mr. Trump said benefited Democrats.

The shift in Mr. Cohn’s prospects for the top Fed job arises largely from his criticism of Mr. Trump’s response to the violence in Charlottesville, Va., the people familiar with the matter said.

The president said in the Journal interview that he was also considering whether to nominate Ms. Yellen for a second term. Mr. Trump has told people that he is impressed with Ms. Yellen, leaving them with the sense he might ask her to serve another term.


The change in Mr. Cohn’s chances potentially bolsters her odds. Other names that have been discussed by Mr. Trump and his team as possible nominees to top Fed posts include former governors Lawrence Lindsey and Kevin Warsh, former BB&T Bank chief executive John Allison, and Stanford University economist John Taylor, according to people familiar with the discussions.

The White House has been considering nominating Marvin Goodfriend, a former research director at the Richmond Fed who is a professor at Carnegie Mellon University, to the Fed’s board, the people familiar said. One possibility would be to nominate an incoming board member, such as Mr. Goodfriend, or a current board member, such as Fed governor Jerome Powell, to the vice-chair post.

Mr. Cohn, director of the National Economic Council, has been running the White House search for Fed chief. A senior administration official said “the president is considering several candidates.” Mr. Cohn’s office directed questions to the White House.

White House spokeswoman Natalie Strom said Mr. Cohn is “focused on his responsibilities…including a once-in-a-lifetime opportunity to deliver meaningful tax reform that creates jobs and grows the economy.” Mr. Cohn may have doomed his chances for the top Fed job with comments he made to the Financial Times last month, according to people close to the president.


The former investment banker had told associates that he was disgusted by Mr. Trump’s performance immediately after the president’s combative news conference on Aug. 15 about the Charlottesville events, according to a person familiar with the matter. Mr. Cohn stood near Mr. Trump at the news conference in the lobby of Trump Tower, which White House officials had intended to focus on the president’s push for investment in infrastructure.

Asked if he considered resigning after the news conference, Mr. Cohn told the Financial Times that he was “reluctant to leave my post.” He also said the Trump administration “can and must do better” to condemn hate groups. “Citizens standing up for equality and freedom can never be equated with white supremacists, neo-Nazis and the KKK,” Mr. Cohn told the newspaper.

Mr. Trump wasn’t aware such a blunt critique was coming, said one person familiar with the president’s thinking. One White House official said the president visibly bristles at the mention of his economic adviser.

Mr. Trump had been eager to talk about the possibility of appointing Mr. Cohn as the next Fed chairman when he spoke about it during the Journal interview. At the time, the president said he had “gained great respect for Gary” during their time together in the West Wing.


A White House official said that Mr. Cohn, a former Goldman Sachs executive, may be able to repair his relationship with the president.

Mr. Cohn is one of the key White House hands shepherding an overhaul of the federal tax code through Congress. If successful, Mr. Cohn may find himself in better standing, the person said.

Meanwhile, Mr. Trump has nominated Randal Quarles, a private-equity executive who served in the Bush administrations, for one opening on the Fed board, but has yet to name his other picks.

A Senate committee is set to vote on Mr. Quarles’ nomination as the Fed’s vice chair for bank regulation on Thursday, and he is expected to ultimately win confirmation. Nominations for all board positions, including the chair and vice chair, are subject to Senate confirmation.


Mr. Fischer’s departure gives the White House a wider range of options in considering how to remake the Fed, but it also adds to the challenge Mr. Trump faces in managing the leadership turnover without roiling markets.

Mr. Fischer’s term as Fed vice chairman was due to end in June 2018, although his term as governor wouldn’t have ended until Jan. 31, 2020. Several people who know him say he has been addressing family health issues. Mr. Fischer is planning to attend the central bank’s next policy gathering Sept. 19 and Sept. 20, when the Fed is expected to announce plans to begin shrinking its portfolio of bonds and other assets accumulated during the financial crisis.

Fed officials in June raised their benchmark federal-funds rate to a range between 1% and 1.25% and penciled in one more rate increase this year. Analysts saw Mr. Fischer as a centrist voice as the Fed’s second-in-command, and slightly less inclined to keep rates low to spur the economy than Ms. Yellen.

However, other policy decisions beyond December are clouded by the leadership succession question, and that uncertainty could increasingly weigh on markets.

Every president since Ronald Reagan has asked the standing Fed leader to stay in the job at the start of his presidency, which has served to underscore the central bank’s relative independence from politics on monetary policy. If Mr. Trump doesn’t follow that pattern, Ms. Yellen would be just the third Fed leader since 1934 to serve only one term.

Ms. Yellen hasn’t said whether she would like to serve a second term, but some friends and former colleagues say her long record of public service and her devotion to the Fed are clues that she would accept a nomination if it were offered.

Nearly three in four economists surveyed by The Wall Street Journal this month said Ms. Yellen should be reappointed as Fed chair. Around two thirds of the same economists said Mr. Cohn is qualified to be chair. The Journal surveyed 56 economists from Sept. 1 to Sept. 5 in its monthly poll.

Write to Michael C. Bender at Mike.Bender@wsj.com, Harriet Torry at harriet.torry@wsj.com and Nick Timiraos at nick.timiraos@wsj.com

Corrections & Amplifications

An earlier version of this article misspelled White House spokeswoman Natalie Strom’s last name. (Sept. 6, 2017)