Federal Reserve System

Trump Unlikely to Name Top Two Fed Officials at Same Time, Mnuchin Says

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“I do have a good relationship with Yellen,” said Mr. Mnuchin, who was careful not to tip his hand. “I expect whoever is appointed by the president as Fed chair, I would expect to have a very good relationship with.”

Mr. Mnuchin is in the midst of a four-country swing to discuss efforts to combat terrorist financing. He held meetings with business leaders and government officials in Saudi Arabia and Israel and on Saturday was en route to the United Arab Emirates, which he will visit before finishing his trip in Qatar on Monday.

The possibility of more sanctions on Iran has been an important topic of discussion with his counterparts in the Middle East, said Mr. Mnuchin, who criticized the Iranians for violating various United Nations resolutions and creating problems in the region. Earlier this week, Mr. Mnuchin commemorated the establishment of a new center in Saudi Arabia targeting terrorist financing that is a collaborative effort between the United States and several Gulf nations.

The Treasury’s lack of action on new Russia sanctions mandated by Congress has irked some Senate Republicans. Mr. Mnuchin said in the interview that he had been in touch this past week with Rex W. Tillerson, the secretary of state, to discuss the status of those sanctions. The Trump administration missed a deadline imposed by Congress to start the process, but Mr. Mnuchin denied that the administration was dragging its feet.

“We expect that to come out in the near future,” Mr. Mnuchin said. “It’s a lot of specific details to go through, but there’s no specific delay per say.”

The Middle East trip comes at a hectic time for the Trump administration’s domestic agenda. Not only is the Fed decision expected this coming week, but Republicans in the House of Representatives are due to release tax legislation on Wednesday.

Mr. Mnuchin said he had been having daily telephone calls with his Treasury colleagues and with lawmakers in the House and Senate as they put the finishing touches on a tax bill. Despite the fact that they have been working on a plan since January, Mr. Mnuchin said there were still “active discussions” taking place over various provisions. Those include finding a way to prevent a new 25 percent tax rate for “pass through” businesses from becoming a loophole that would allow wealthy individuals to lower their tax bills. And he said it was too soon to say if Republicans would fully repeal the state and local tax deduction, which allows homeowners to deduct property and state and local income taxes from their federal tax bill.

“We’ve been having a lot of discussions on the SALT issue,” Mr. Mnuchin said, using the acronym for the deduction, “and what the impact of that is in several states that are a big part of the economy.”

Mr. Mnuchin said on Saturday that he remained optimistic that the tax cuts could be passed and signed by the president by December.

“If we could do it quicker, that would be great,” he said.

Mr. Mnuchin also said it was difficult to define which American families should be defined as middle class or rich — a key question lawmakers face as they set income levels for new tax brackets. He said that relative wealth varies with states’ and cities’ cost of living but that his priority is for people around the national median income level to get tax cuts.

In Saudi Arabia and Israel, where Mr. Trump is popular, Mr. Mnuchin drew a warm welcome.

Mr. Mnuchin, his wife, Louise Linton, and a Treasury delegation toured the Old City of Jerusalem for more than an hour on Friday. Several onlookers who recognized him approached to shake hands, offer praise and pose for photographs.

Surrounded by a phalanx of Secret Service agents, Mr. Mnuchin and his group meandered though the stone pathways of the Muslim, Christian and Jewish quarters. They also visited the Church of the Holy Sepulcher and the Western Wall, where Mr. Mnuchin prayed and inscribed the guest book at one of the most holy sites in Judaism.

After his prayer, Mr. Mnuchin expressed hope for strength, peace and prosperity.

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Wendy Pettit

Wendy Pettit is a writer for NYT and writes for other publications on her spare time. She lives in Chicago with her husband and her dog Zuko.

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