Janet Yellen to Get Fed Reins
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In what will likely be viewed bullishly by the market, President Obama is expected to name Janet Yellen as the next Chairman of the Federal Reserve, replacing Ben Bernanke who's term expires at the end of January. An announcement could come as soon as Wednesday.
Starting in 2006, Mr. Bernanke has been at the helm throughout the most treacherous period in U.S. economic history since the Great Depression. Polices he put in place have single-handedly pulled the economy from the brink of another depression. Much of those policies, including a near zero fed funds rate and aggressive asset monetization, remain in place. Under his watch, the Fed's balance sheet has ballooned to an unimaginable $3.66 trillion.
Pleasing to the market is the fact that Ms. Yellen has been with him much of the way. Yellen took office as Vice Chair of the Board of Governors of the Federal Reserve System on October 4, 2010. Prior to her appointment as Vice Chair, Yellen served as President and Chief Executive Officer of the Twelfth District Federal Reserve Bank, at San Francisco. In addition to time working hand-in-hand with Bernanke, Yellen has shown that she is worth her salt. In 2007, before the crash, Yellen expressed grave concerns about frothiness in markets before many of her colleagues. Still some believe Yellen is decidedly more dovish than Bernanke. That remains to be seen.
Either way, the job, is not without much uncertainty. The Fed is at a place no one could have imagined pre-credit crisis. In her new role, Yellen will be responsible for tapering the $85 billion monthly bond buying program. Bernanke balked at the widely-expected tapering during the September meeting in part due to uncertainty in Washington - which has now come home to roost with the shutdown and potential debt default. It is now expected that a tapering won't come until after Bernanke's term expires.
Starting in 2006, Mr. Bernanke has been at the helm throughout the most treacherous period in U.S. economic history since the Great Depression. Polices he put in place have single-handedly pulled the economy from the brink of another depression. Much of those policies, including a near zero fed funds rate and aggressive asset monetization, remain in place. Under his watch, the Fed's balance sheet has ballooned to an unimaginable $3.66 trillion.
Pleasing to the market is the fact that Ms. Yellen has been with him much of the way. Yellen took office as Vice Chair of the Board of Governors of the Federal Reserve System on October 4, 2010. Prior to her appointment as Vice Chair, Yellen served as President and Chief Executive Officer of the Twelfth District Federal Reserve Bank, at San Francisco. In addition to time working hand-in-hand with Bernanke, Yellen has shown that she is worth her salt. In 2007, before the crash, Yellen expressed grave concerns about frothiness in markets before many of her colleagues. Still some believe Yellen is decidedly more dovish than Bernanke. That remains to be seen.
Either way, the job, is not without much uncertainty. The Fed is at a place no one could have imagined pre-credit crisis. In her new role, Yellen will be responsible for tapering the $85 billion monthly bond buying program. Bernanke balked at the widely-expected tapering during the September meeting in part due to uncertainty in Washington - which has now come home to roost with the shutdown and potential debt default. It is now expected that a tapering won't come until after Bernanke's term expires.
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