Dr. Summers' retreat has achieved
That Yellen looks strong
For Fed Chair, as long
As the President isn't too peeved.
Barack wants a servant devoted;
For Larry, his voice was full-throated,
But some would impugn
His trial balloon
As too freighted with bags to be floated.
Who the next Chair will be there's no tellin',
Though the bond market clearly loves Yellen,
And stock market buys
Reacted with highs,
While the dollar was laden with sellin'.
Janet's a calm, steady hand
When tapering QE is planned,
And it's all to the good
That the Chairmanship would,
With a woman, be ably manned.
The Wall Street Journal reports that, now that Larry Summers has officially removed himself from consideration for the Fed Chairman's post, current Vice Chair Janet Yellen is the front-runner. This is somewhat surprising in that President Obama and his White House team were said to be very upset at the public resistance to Prof. Summers, their preferred choice, and might have resented the liberal pressure to go with Dr. Yellen instead. The reaction of the markets shows that traders expected a quicker tapering of quantitative easing from him than her, though a close reading of their relevant remarks does not offer clear confirmation of such a distinction.
What is clear is that Dr. Yellen's career offers a wealth of reassuring experience to indicate a likelihood of consistent leadership on issues of not just monetary policy, but also financial sector regulation, which the country very much needs.