Ben Bernanke is expected to retire when his term as Chairman of the Federal Reserve ends this year.
Current Vice Chair Janet Yellen is considered the favourite to fill the vacated seat.
But the controversial former Treasury Secretary Larry Summers has recently emerged as a frontrunner.
Some experts believe a Summers nomination could face a lot of hurdles in Congress.
To that end, Citi’s Matthew Dabrowski and Tina Fordham review Fed governor nominations that just didn’t work out:
As we noted in January, only seven Cabinet nominees have been rejected or withdrawn since Reconstruction (i.e. the 1870’s), and six of those were due to personal scandal on the part of the nominee. For the Fed, no Chairman has ever been rejected, though Woodrow Wilson lost a handful of his picks for the initial board in 1914.
More recently, a handful of Fed Governor nominations have been held or even rejected by the Senate. Bill Clinton lost two of his nominees at the height of the Whitewater scandal, and two of George W. Bush’s were left waiting as his administration drew to a close. More notable was the 2010 rejection of Peter Diamond. With the U.S. recession hitting its low point at the time, Senators focused on Diamond’s lack of direct experience with monetary policymaking.
In our view, the Senate isn’t likely to reject Obama’s final pick. The recent track record described above doesn’t apply here. No overarching personal scandal is attached to the President, nor can the Senate wait out the last three full years of Obama’s term before approving a Fed Chair.
So, the good news is whoever Obama nominates will probably see a clear path to Bernanke’s vacated seat.
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