Federal Reserve Chairman Ben Bernanke’s term is up in January and the battle to influence President Obama’s next nominee choice has been unusually political, with a heated, albeit unofficial campaign underway, between Larry Summers and Janet Yellen.
Yellen would be the first ever female Fed chair. Many point to her experience of 13 years at the Federal Reserve and her current post serving as the Fed’s board of governors’ vice chairperson as abundant qualification for the job. But Summers, a former Treasury secretary and Obama’s former head of the National Economic Council, is seen as closer to the While House and administration.
Politico’s Ben White and Former White House adviser Jared Bernstein joined The Daily Rundown on Tuesday to discuss the very public battle over the future of the Federal Reserve chairmanship.
“I am surprised by it. You never see a succession at the Fed get into this kind of politics where there is a lot of behind the scenes jockeying and there are a lot of folks trying to put forward their candidate in the best possible light,” White said.
One example is the letter that a group of Senate Democrats sent the White House asking President Obama to support Yellen for the post.
But many White House insiders believe Larry Summers is more likely to be the president’s pick.
“I think it’s clear at this point that Summers has the inside track because Obama is very comfortable with him and knows him very well. Everybody inside the White House and outside the White House that used to work there that I’ve talked to says it's Summers. So I would be surprised if it’s Janet Yellen at this point,” White explained.
Summers, a trusted White House insider, has made it clear that he would focus chiefly on reducing the unemployment rate—a priority President Obama has reiterated as necessary for this position. But since Yellen also shares this priority, it complicates Obama’s choice.
“They are both going to try to bring down the unemployment rate,” White added. “They are not going to be that much different. A lot of it gets back to gender politics; it gets back to some rivalries internal with the White House and we’re going to see that play out.”
While Summers and Yellin are the two most talked about options, the president could also nominate someone who is less visible at the moment. Other possible picks include John Taylor, Glenn Hubbard, Roger Ferguson and Martin Feldstein. Outgoing Treasury Secretary Timothy Geithner has also been mentioned as a potential pick.
“There have been various stories about somebody splitting the middle. I don’t buy them too much. I think it’s one of these two,” Berstein said.
No matter who he picks, it will still be several months before we know. The White House has said that it will not be announcing Obama’s pick for Fed Chair until this fall.