U.S. President Barack Obama officially nominated Janet Yellen as the next Federal Reserve Chairman today (Wednesday).
Dow and S&P 500 futures immediately jumped late Tuesday on news the nomination was coming. A vote for Yellen suggests continuity, not change.
As Chief Investment Strategist Keith Fitz-Gerald has said, "Yellen has never met a printing press she didn't like."
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Larry Summers shocked Wall Street and Washington circles on Sunday by withdrawing his name for consideration as the next U.S. Federal Reserve chairman.
Summers wrote in a letter to U.S. President Barack Obama, "I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration, or ultimately, the interests of the nation's ongoing economic recovery."
His decision comes at a critical point for the Federal Reserve.
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On Tuesday, Federal Reserve Bank of Chicago President Charles Evans announced that he wouldn't be surprised if the central bank begins to taper its $85 billion monthly bond-buying program in September.
Evans is the third official this week to signal a QE taper. Richard Fisher, president of the Dallas Fed, and Dennis Lockhart, president of the Atlanta Fed, parroted Evans' sentiment.
While Fisher indicated he would prefer to cut back bond purchases in August, Lockhart stated a preference for a September QE taper, although the Fed could wait longer if economic growth and unemployment trends reverse.
But it is Evans' announcement that is the most important. Evans is a member of the activist wing of the Federal Reserve. These members strongly support unconventional monetary policies such as bond buying, which are designed to reduce borrowing costs to spur aggregate demand and hiring across the country.
His views reflect those of the majority of members of the FOMC, the Fed's monetary policy committee.
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These 5 contenders for the next Fed chairman in 2014 are each committed to the same tired easy money policies that have failed – aka Bernanke 2! Read more...
