(Adds announcement to come next week)
WASHINGTON, Oct 27 (Reuters) - President Donald Trump is leaning toward nominating Federal Reserve Governor Jerome Powell to be the next head of the U.S. central bank, two sources familiar with the matter said on Friday.
The sources cautioned that while Powell had emerged as the leading candidate from a short list of five, Trump had not made a final decision and could always change his mind.
Bloomberg News reported earlier on Friday that Trump was leaning toward nominating Powell, citing three sources.
Trump has said he has been considering Powell, as well as Stanford University economist John Taylor, for the post. He also has said he has not ruled out renominating current Fed Chair Janet Yellen, whose term expires in February.
He is expected to announce his pick, which would need to win Senate approval, before he departs on a trip to Asia on Nov. 3.
White House spokeswoman Sarah Sanders said on Friday Trump would make the announcement next week.
Trump had been working from a short list of five candidates that included his top economic adviser, Gary Cohn, and former Fed Governor Kevin Warsh.
A senior administration official said on Wednesday that Trump was unlikely to nominate Cohn given the importance of his role in helping to lead efforts to enact a big tax cut package. Warsh's star also has faded, according to media accounts.
Trump has also privately voiced a desire to put his own stamp on the central bank, which has dimmed prospects of him giving a new term to Yellen, another source said.
In an interview with Fox Business Network last Friday, Trump indicated he could nominate both Powell and Taylor for top jobs at the central bank. A vice chair post is currently open. (Reporting by Steve Holland, Tim Ahmann, and Jeff Mason; Editing by Andrea Ricci)