US President Donald Trump nominated Jerome Powell to run the Federal Reserve once current Chair Janet Yellen's term expires, in a move widely expected and one unlikely to disturb the roaring stock market.

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Trump made the announcement during an afternoon ceremony in the Rose Garden.

The move follows an extended period of speculation over who would be named to head the central bank, whose aggressive policies have been considered central to a climate of low interest rates and booming asset prices.

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"Today is an important milestone on the path to restoring economic opportunity to the American people," Trump said with Powell standing to his right. The president said the Fed requires "strong, sound and steady leadership" and Powell "will provide exactly that type of leadership."

"He's strong, he's committed and he's smart, and if he is confirmed by the Senate, Jay will put his considerable talents and experience to work leading our nation's independent central bank," Trump added.

Powell led a diverse field of potential nominees that included former Governor Kevin Warsh, Stanford economist John Taylor, chief Trump economic advisor Gary Cohn, and Yellen herself.

"I'm both honored and humbled by this opportunity to serve our great country," Powell said.

"If I am confirmed by the Senate, I will do everything within my power to achieve our congressional assigned goals of stable prices and maximum employment," he added.

Trump's relationship with Yellen evolved; during the 2016 presidential campaign he said the Fed chief should be "ashamed" of the way she has run the Fed, arguing that Yellen kept policy loose for political reasons to boost the fortunes of former President Barack Obama.

Since taking office, though, his views changes and he offered warm words for her Thursday despite deciding to replace Yellen and make her the briefest-serving Fed chair since G. William Miller served from 1978-79.

"I think the president has made a spectacular choice, and I'm really supportive of what the president is doing," Cohn told the Economic Club of Washington, D.C. earlier in the day. "I'm really supportive of the president."

Powell was named to fill an unexpired term in 2012 that won't end until 2028. He is viewed as a convenient choice, someone who likely will continue the programs of the Yellen Fed but allow Trump a chance to put his own stamp on the central bank.

The Fed is in the midst of normalising the historically accommodative monetary policy it had begun to help pull the US from the throes of the financial crisis and the Great Recession.

Under Yellen, the Fed has hiked interest rates four times and is expected to approve another increase in December. In addition, it is unwinding its $4.5 trillion balance sheet, which primarily consists of bonds the Fed purchased in an effort to drive down mortgage rates and push investors to risk assets like stocks and corporate bonds.

Powell has been part of the Fed's voting consensus since taking his seat, not once veering from the majority's position.

First Published:Nov 3, 2017 12:45 AM IST