How Will the Next Chairman Approach Fed Policy?
Ben Bernanke’s second term as Chairman of the Federal Reserve will end in January, and word on the street is that he will not seek (or be offered, depending how you look at it) a third term. This means that for the first time since 2006, the position — one of the most powerful policy posts in the world — is up for grabs.
As it stands, the job is a toss up between two candidates: current Fed vice chair Janet Yellen and former Treasury Secretary Lawrence Summers. Sometime between now and January, President Barack Obama will nominate one of them, and that candidate will have to be confirmed by the Senate. (If the president fails to nominate or the Senate fails to confirm someone, then Yellen, as current vice chair, will automatically assume the office.)
Speculation as to who will get the presidential nod has been rampant. Yellen is something of a crowd favorite, while Summers is rumored to have the ‘inside track’ thanks to his work for the Obama Administration. For his part, when asked about the nomination, the president has made it clear that while both economists — as well others, perhaps including former Fed Vice Chair Donald Kohn — are on the short list, they are all receiving fair and objective consideration.