The latest Barron’s cover story from Randall Forsyth focuses on President Trump’s selection of the Federal Reserve’s next leader.

Who will lead the Fed is a vitally important decision for any president, especially for Donald Trump, who has sought to fundamentally change Washington and the U.S. economy. And with Janet Yellen’s term set to end in February, the speculation of whether she gets a second four-year stint or is succeeded by somebody else has been looming large over Washington, Wall Street, and the global markets for weeks.

The candidates for central bank chief appear to be winnowed down to three: Fed Gov. Jerome Powell, Stanford University economist John Taylor, or Yellen herself, with reports on Friday that Trump has settled on Powell as his pick. …

… The real change in Fed policy won’t be seen until the next bout of financial market turbulence or the next economic downturn, or both. Will the central bank under new leadership react to a decline in asset prices by slashing interest rates and pumping money into the financial system as aggressively as in the past? And perhaps more to the point, will a Fed led by Trump appointees follow a less restrictive regulatory tack and let markets function more freely? Will that mean profitability for banks and other institutions—but also greater risk when the financial markets encounter turbulence, as they inevitably do? As for the candidates, Yellen, a registered Democrat, was always a long shot to gain a second term, mainly because of politics, despite overseeing an economy with low unemployment and inflation—the Fed’s two main mandates—and a record stock market. Even so, there is ample precedent for her to be renominated by a GOP president. Indeed, each of the past three Fed chairs got nods for new terms after having been originally named by previous presidents of different parties. …

… Presidents, however, typically prefer to nominate officials of their own party who are more in accord with their policy goals.

THAT MAKES POWELL the leading candidate to succeed Yellen, and the one who has the support of Treasury Secretary Steven Mnuchin, according to various reports. The stock market, for its part, climbed on Friday on reports that Trump was leaning toward picking him. A Republican who currently sits on the Fed Board of Governors, Powell has generally supported the Fed’s policies. But he also is likely to be more inclined to a lighter touch on regulation.