Obama getting ready to reveal next Fed boss

Tim Wallace
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PRESIDENT Obama is examining the field of candidates to take over from outgoing Federal Reserve chairman Ben Bernanke, he said over the weekend, and will announce the next central bank boss in the coming months.

A host of top academics and policymakers are in the running for the job, from without the Fed and outside it.

But Obama said he is working on cutting down the field.

“I’m looking for is somebody who understands the Fed has a dual mandate, that that’s not just lip service; that it is very important to keep inflation in check, to keep our dollar sound, and to ensure stability in the markets,” the President told the New York Times in an interview.

“I have not made a final decision. I’ve narrowed it down to some extraordinarily qualified candidates.”

The central bank has a dual mandate to keep inflation and unemployment low, and Obama said his main aim is to find a candidate who can balance those carefully. The US economy is recovering more quickly than those in Europe or the UK, but unemployment remains relatively high.

As a result Bernanke has recently about slowing the pace of money printing over the next year, but not actively tightening policy until unemployment is much lower.

The two leading candidates so far are believed to be Federal Open Markets Committee member Janet Yellen, and Bill Clinton’s Treasury secretary Larry Summers.

Others in the frame include ex-Fed and now Bank of England official Donald Kohn.



The Federal Reserve’s vice chairman Janet Yellen was an early favourite in the race. The long-term policymaker is widely considered one of the most dovish members of the Federal Open Markets Committee and is likely to meet Obama’s demand for stimulus to continue until the economy is growing very strongly. She headed Bill Clinton’s council of economic advisers in the 1990s, and is a University of California professor. She is PaddyPower’s favourite at 1/3.

Another Clinton-era policymaker, Lawrence Summers was Treasury secretary from 1999 to 2001, went on to head up Harvard and then followed Yellen onto the council of economic advisors. He is at 4/1 with the bookies.

Romer is a colleague of Yellen at the University of California at Berkley, and another former chair of the national economic council. She is known for favouring a huge fiscal stimulus in the US, and is a 22/1 shot in the betting markets.

A Fed insider turned policymaker on the Bank of England’s financial policy committee, Kohn comes in as a 33/1 outsider.