Former Federal Reserve Vice Chairman Donald Kohn, considered the dark horse candidate to replace current Fed chairman Ben Bernanke when Bernanke’s term expires in January, is surging on betting website Paddy Power this morning.
BNP Paribas economist Julia Coronado doesn’t think there’s much to all the chatter about Kohn, though:
On the chatter about Kohn — the decision will be made based on political capital. Obama lost on Summers because his political [capital] is low, it would cost him dearly to get Summers into the seat, and he needs as much as he can get for the upcoming budget fight. He lost on Summers, the campaign was as much pro-Yellen as it was anti-Summers; why spend more capital on this fight?
Are you really going to go with passing over the most qualified and only female candidate yet again? [Senior Advisor Valerie] Jarrett and [White House Chief of Staff Denis] McDonough won’t let him be that politically stupid. Add to that the fact that Don doesn’t really want the job and Janet really does. This chatter is coming from market types that don’t know anything. The reports citing White House sources all have said she is the strong front runner.
“I think people are bored waiting for the decision this afternoon,” says Coronado.