REPORT: Larry Summers Is The Fed Frontrunner

lawrence larry summers ben bernankeDirector of the National Economic Council Lawrence Summers (L) talks with U.S. Federal Reserve Board Chairman Ben Bernanke as they wait in the East Room of the White House in Washington for President Barack Obama’s remarks laying out a comprehensive regulatory reform plan in June 17, 2009.

Every day, it seems like there’s a new report out asserting that either Federal Reserve Vice Chairman Janet Yellen or former Treasury Secretary Larry Summers is the frontrunner to replace Fed Chair Ben Bernanke when his term expires in January.

The latest is from Ezra Klein at the Washington Post, who writes an article today titled “Right now, Larry Summers is the front-runner for Fed chair.”

Citing “conversations with plugged-in sources both inside and outside the process,” Klein writes that Summers is “increasingly viewed as the leading candidate today — and opinions on this, for reasons I don’t fully understand, have really hardened in the last 72 hours.”

Klein gives five reasons why: President Obama and his staff like Summers, they’re looking for someone who will stay true to the Fed’s dual mandate of low unemployment and low inflation, they’re looking for someone who can deal with international crises should they arise, they think financial markets trust Summers more than Yellen, and they perceive Summers’s reputation as being hard to work with as being overblown.

“Against all that, the conventional wisdom — which I fully bought into — a month or two ago was that Summers had little real chance,” says Klein. “But though I’m a bit surprised to be saying this, at this point, my reporting says he’s the front-runner.”

Of course, critics of the Summers argument point out that a lot of the ruminating from the White House on Summers for Fed chair could be out of respect for Summers, who, as Klein points out, has worked with and is friends with a lot of these people.

After all, Summers has expressed interest in the position.

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