Ever since people started talking about Ben Bernanke retiring from his post as Chairman of the Federal Reserve, current Vice Chair
Janet Yellen has been considered the clear favouriteto fill the vacated seat.
But more recently, former Treasury Secretary Larry Summers has emerged as a frontrunner.
Deutsche Bank’s chief economist Peter Hooper believes he has now moved into the front. From his note to clients on Friday:
Bernanke’s successor: Summers now the favourite. Over the past month, the momentum for succeeding Bernanke as the next Fed chair has swung in favour of Larry Summers. While both Summers and Yellen are, in our view, more than capable to lead the Fed, Summers has appeared to benefit from his familiarity with the Obama administration. Lending further support to Summers being the likely successor is the fact that Yellen has indicated that she believes she is unlikely to be nominated. In terms of other candidates, Geithner, Kohn, and Ferguson are all still possibilities, and the nomination could well fall to one of these other candidates if the administration encounters significant difficulties in the confirmation process for Summers. A Summers appointment could mean a slightly faster taper and potentially a somewhat more aggressive pace of rate hikes down the road than under a Bernanke or Yellen Fed. But the differences would be modest because the next Fed chair will be constrained by the data, market reactions, and FOMC dynamics.
It’s worth reiterating that Summers is by no means the consensus favourite.
James Pethokoukis cites a new note from Potomac Research Group’s Greg Valliere who says a Summers pick is in doubt: