Race for Fed Chair Heating Up

Discussions about the future Federal Reserve Chairperson heated up lastweek.  Three early contenders have emerged: Janet Yellen , Vice Chairwomen of the Federal Reserve; Donald Kohn, former Federal Reserve Vice Chairman; and Larry Summers (former director of the White House National Economic Council and President of Harvard University).  The trio is well suited for the role.  SNWAM is focusing on the contenders’ views on inflation and quantitative easing and how they would communicate Federal Reserve Policy to the market.  Initial indications show Yellen would follow the relatively dovish policies currently in place.  Kohn, although a supporter of current Fed Chairman Bernanke’s policies, has shown reluctant support of current policy by urging caution and watching for unintended consequences.  Summers is known for not being shy about sharing his opinion and has cast doubt on the effectiveness of quantitative easing.  We expect more details to emerge about the prospective Fed Chairperson replacement in the weeks to follow (and a decision to be made by this fall)  and will be watching for indications about the quantitative easing timeline.