Former Treasury Secretary Larry Summers has
withdrawn his name from contention to succeed Ben Bernanke as Federal Reserve chairman.
Now, lots of people think President Obama will (or, in the case of our Josh Barro, as well as 200+ economists, should) pick current Vice Fed Chairwoman Janet Yellen.
But Capital Economics’ Chief U.S. Economist Paul Ashworth thinks the administration may not end up doing so.
In a new note, he writes that the mechanics of getting Yellen through the Senate — as well as the president’s own possible preference — does not bode well for her candidacy.
The Obama administration has shown little, if any, enthusiasm for Yellen … so we’re not convinced she will necessarily get the nod. Summers candidacy was sunk by the opposition of many Senate Democrats, which would have made it hard, if not impossible, to get his nomination confirmed. Nominating Yellen now could make Obama look weak, kowtowing to the Democrats who have been openly campaigning for her.
Instead, it now seems former Fed Vice Chairman Donald Kohn, Treasury Secretary Tim Geithner, or some as-yet-unknown candidate all arguably have an equal shot:
Instead, it’s possible that there will now be a delay in the nomination process, while the administration seeks a new candidate. We know Obama has already interviewed Ex-Fed Vice Chair Donald Kohn and we wouldn’t rule out the administration seeking to change Tim Geithner’s mind. All things considered, Yellen is probably now the favourite, but not the near-certainty that many will proclaim her to be.
Bernanke steps down in January.