In an announcement at the White House on Thursday,Trump called Powell a strong,committed and smart leader.
"He has proved to be a consensus builder for the sound monetary and financial policy that he believes in ... based on his record I am confident that Jay has the wisdom and leadership to guide our economy,"Trump said as the Fed nominee looked on.
The decision offers a bit of both worlds,allowing Trump to select a new Fed chief while getting continuity with a Yellen-run central bank that has kept the economy and markets on an even keel.
Powell,a 64-year-old lawyer and former investment banker,has backed Yellen's general direction on monetary policy and,in recent years,shared her concerns that weak inflation justified a continued cautious approach to raising interest rates.
In June,he laid out both a defence of the Fed's gradualist path and a critique of those,including some of his competitors for the Fed's top job,who argued that the central bank had increased the risk of high inflation and other problems.
Trump on several occasions has said he would prefer rates to stay low,a position at odds with some of those who were on his short list for the Fed job,particularly Stanford University economist John Taylor and former Fed governor Kevin Warsh. Top White House economic adviser Gary Cohn also was a contender.