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16 Sep 2013
After Summers shocker, business-as-usual for the Fed?
FXstreet.com (Chicago) – Larry Summers withdrew his bid to become Ben Bernanke's potential replacement as the Chairman of the Federal Reserve Bank of the United States. Seen as a shocker by many, new names announce a potential continuation of similar policies with "business as usual" in the country as the remaining candidates are perceived as replica of Bernanke’s decision making process.
“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery”.
With those words, Chairman Candidate for the Federal Reserve of the United States, Lawrence Summers, withdrew his bid for one of the most important public posts in the country. Having served as the US Secretary of the Treasury for former President Bill Clinton (1999- 2001) and Director of the White House for current President Barack Obama (2009 – 2010), Summers was perceived as the top candidate to replace current Chairman Ben Bernanke. At critical times for the United States and its economy –with notably, the Fed decision to taper the $85B bond-buying program – Summers may have dropped the ball, but the game always goes on.
Who follows?
Shortly after Summers’ announcement, besides usual criticism and speculations, a few names have been circulating among market participants around the world. Due to his reserve manner to enunciate public views on policy, Summers was perceived as the game-changer, as some sort of maverick who could shake up the usual business around the Fed. As mentioned by Fed economics and current senior fellow at the Ziman Center for Real Estate at the University of California, Los Angeles, “Summer was just a bit of an unknown because he hadn’t really enunciated a low of views on policy”.
Among potential new replacements there is Jannet Yellen who is the current Vice Chairwoman of the Board of Governors of the Federal Reserve System and has been the former President and Chief Executive Officer of the Federal Reserve Bank of San Francisco, the former Chair of the White House Council of Economic Advisers under President Bill Clinton and has also served as a professor Emerita at UC- Berkeley. Ezra Klein, reporting for the New York Times, states “she would be the most qualified Federal Reserve chair in memory” and adds she is a “consensus pick” favored by congressional Democrats and organized labor. Seen as the most likely candidate to succeed Mr. Bernanke, as reported by the WSJ, “she offers the most certainty of continuity because she has been at his [Bernanke] side for the past three years and is a strong advocate of his policies”. Other names circulating are Treasury Secretary Timothy Geithner, former President of the Federal Reserve Bank of New York and Vice Chairman of the Fed Roger Ferguson.
The Chairman of the Federal Reserve is in charge of timing efficiently and effectively monetary programs to reduce inflation and increase employment. With a scheduled announcement of a possible bond-buying program reduction by the Fed, the week promises as one of the most defining weeks of the year for the US economy.
“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery”.
With those words, Chairman Candidate for the Federal Reserve of the United States, Lawrence Summers, withdrew his bid for one of the most important public posts in the country. Having served as the US Secretary of the Treasury for former President Bill Clinton (1999- 2001) and Director of the White House for current President Barack Obama (2009 – 2010), Summers was perceived as the top candidate to replace current Chairman Ben Bernanke. At critical times for the United States and its economy –with notably, the Fed decision to taper the $85B bond-buying program – Summers may have dropped the ball, but the game always goes on.
Who follows?
Shortly after Summers’ announcement, besides usual criticism and speculations, a few names have been circulating among market participants around the world. Due to his reserve manner to enunciate public views on policy, Summers was perceived as the game-changer, as some sort of maverick who could shake up the usual business around the Fed. As mentioned by Fed economics and current senior fellow at the Ziman Center for Real Estate at the University of California, Los Angeles, “Summer was just a bit of an unknown because he hadn’t really enunciated a low of views on policy”.
Among potential new replacements there is Jannet Yellen who is the current Vice Chairwoman of the Board of Governors of the Federal Reserve System and has been the former President and Chief Executive Officer of the Federal Reserve Bank of San Francisco, the former Chair of the White House Council of Economic Advisers under President Bill Clinton and has also served as a professor Emerita at UC- Berkeley. Ezra Klein, reporting for the New York Times, states “she would be the most qualified Federal Reserve chair in memory” and adds she is a “consensus pick” favored by congressional Democrats and organized labor. Seen as the most likely candidate to succeed Mr. Bernanke, as reported by the WSJ, “she offers the most certainty of continuity because she has been at his [Bernanke] side for the past three years and is a strong advocate of his policies”. Other names circulating are Treasury Secretary Timothy Geithner, former President of the Federal Reserve Bank of New York and Vice Chairman of the Fed Roger Ferguson.
The Chairman of the Federal Reserve is in charge of timing efficiently and effectively monetary programs to reduce inflation and increase employment. With a scheduled announcement of a possible bond-buying program reduction by the Fed, the week promises as one of the most defining weeks of the year for the US economy.