Speaking before a sea of reporters, President Barack Obama confirmed what had become all but obvious: Janet Yellen will be the next chair of the U.S. Federal Reserve.
Her official nomination comes after a very public process involving the rise – and subsequent fall – of Lawrence Summers, former Treasury head and Obama administration economics guru. Doubts among Senate Democrats about Summers' willingness to take on Wall Street and the president's invisible support doomed his candidacy, and he withdrew it in an open letter to Obama. After that, it was virtually certain that Yellen would get the nod.
During the presser, Obama indicated that Yellen, who has been with the Fed for over 30 years, was well-suited for the position. She has served as Ben Bernanke's top lieutenant since the beginning of the Great Recession and has been a voice of support for the controversial quantitative easing (QE) policy.
"Given the urgent economic challenges facing our nation, I urge the Senate to confirm Janet without delay," the president declared, according to The New York Times. "I'm absolutely confident that she will be an exceptional chair of the Federal Reserve."
Given the fact that Yellen has the broad support of Senate Democrats, who currently control the upper chamber of Congress, it's likely that she will be confirmed. Indeed, given the lack of other viable candidates, Yellen will almost certainly take over at the Marriner Eccles Building in January.
As for how the markets will respond, a slight bump-up in stock prices occurred when Summers dropped out of the running. There were also a few upward developments in stocks when the rumor hit that Obama would be announcing his choice in October. However, anxieties regarding the debt-ceiling increase and the ongoing government shutdown may have clouded any positive impact Yellen's nomination may have had.
Even though Yellen is likely to continue QE until the labor market improves, volatility – especially given the current political crises taking place – is still a problem. Portfolio risk management is vital during this period, and can be accomplished through the use of SmartStops. Explore our website further today to learn more.
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