Larry Summers faces challenging Fed nomination battle
In recent months, Janet Yellen, the vice chairperson of the Federal Reserve and the presumed heir to Chairman Ben Bernanke, has seen a shift in her stars as more momentum appears to be moving toward Lawrence Summers, the one-time Treasury Secretary and Obama administration economic advisor. Summers, who has received his share of criticism over alleged financial improprieties, character flaws and mismanagement at both the White House and Harvard University, is expected to face an uphill nomination climb should he get the nod from President Barack Obama. According to some inside sources, this battle may be a lot steeper than previously acknowledged.
Several Congressional members, speaking with the Wall Street Journal in a series of interviews, stated that Summers by no means has the support of the nation's legislators. If anything, Yellen has already received the firm backing of Congressional leaders and major media sources, including The New York Times.
Yet Summers is presumed to have the private support of the president. While President Obama has yet to remark publicly about the candidacies of Yellen and Summers, insiders say that the president is skeptical about Yellen's loyalty and may prefer to have a seasoned – and thoroughly vetted – nominee like Summers go before Congress.
Once he arrives, however, Summers will likely face questions regarding his tenure at Harvard, where he lost a faculty vote of confidence following a string of scandals and mishandled incidents. There are also reports that, during his time as chair of the National Economic Council, Summers engaged in egotistical behavior and was more concerned about personal comforts than actually performing his assigned duties,
Only time will tell how Summers' nomination will go, should he be picked. The market's reaction should be interesting, although it remains to be seen whether Summers or Yellen would strike a pro-QE stance – something that many market participants would love. In the meantime, investors should strongly consider the portfolio management tools of SmartStops, which help pinpoint risky stocks before they become a problem. Explore our website today to learn more!