Harvard Professor Larry Summers yesterday requested that his name be withdrawn from consideration for next chairman of the Federal Reserve. Let me outsource to a few others for comments.
I have reluctantly concluded than any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.
Let me just say that Janet Yellen is now clearly by far the best technocratic choice for Fed chair of those on the short list.
The market reaction stems from the belief that Summers is a hawk and Yellen is a dove. While I understand that this is a widely held belief, I think it is insulting to both candidates to paint them with such broad strokes. I think that either candidate would be hawkish or dovish as the situation required. I also think that if you believe Yellen is an unabashed dove, you are going to be surprised by her reaction if inflation rears its head in the slightest.
One leading candidate is Janet Yellen, the Fed’s current vice chairwoman, who has garnered substantial support among Democrats in Congress and among economists. But the public lobbying on her behalf appears to have annoyed the president, say administration insiders, and may lead him to look elsewhere.