Continued from Part 2
Because Bernanke will step down, there’s great speculation on who will replace him
So who is it likely to be the next Bernanke?
The case for Summers
Between the two, Summers certainly has more excitement building around him than Yellen. Summers also has Wall Street credibility—at least more so than Yellen. That’s not to say that Yellen is in any way unqualified. She has a lifetime of experience in macroeconomics and working in the Fed system.
Her weakness as a candidate perhaps is that she’s relatively unknown worldwide compared to Summers—yet this may be as much an asset, given some of Summers’ negative publicity in the past and the somewhat technocratic nature of the Fed.
The case for Yellen
Summers has a history of misspeaks and is potentially abrasive according to multiple media sources, such as the Washington Post and Financial Times. While in normal economic times, the character of the Fed Chairman may not be of such concern, the current situation places a very close eye on the Fed. A single misspeak could easily erode market confidence.
Additionally, Larry Summers hasn’t been a Fed governor and hasn’t been under the direct apprenticeship of the highly venerated Bernanke. So, based on on-the-job experience, it seems that the obvious choice would be Janet Yellen.
© 2013 Market Realist, Inc.
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