Yellen overwhelming favorite to replace Bernanke at Fed: Reuters poll
Federal Reserve Vice Chair Janet Yellen addresses the 29th National Association for Business Economics Policy Conference in Washington March 4, 2013. Credit: Reuters/Gary Cameron
By Pedro Nicolaci da Costa
WASHINGTON | Wed Jun 12, 2013 11:31am EDT
(Reuters) - Janet Yellen, the Federal Reserve's powerful vice chair, is by far the most likely candidate to replace Ben Bernanke when his second term at the helm of the U.S. central bank ends early next year, according to a Reuters poll of economists.
The poll found that an overwhelming 40 of 44 economists said Yellen, the former president of the San Francisco Federal Reserve Bank, will take over for her boss in February 2014. Support for her nomination was strong but less decisive, with 23 of 38 economists backing Yellen's bid for the top job.
Yellen, a 66-year old economist who is seen as a monetary policy dove, has held the No. 2 spot at the central bank since 2010. She has been a forceful advocate of the aggressive steps taken under Bernanke to spur U.S. economic growth and boost employment.
"If President Obama nominates Janet Yellen, it would be a feather in his cap, as the first president to nominate a female Fed chairman," said Ellen Zentner, an economist at Nomura.
Bernanke has not said whether he wants a third term but has done nothing to dispel growing speculation he will step down.
Only three of the economists in the survey predicted Bernanke would stick around for another four years, while one predicted Fed Governor Jeremy Stein would get the job.
Other names that have been floated as possible successors are Larry Summers, a former adviser to President Barack Obama, former Treasury Secretary Timothy Geithner and former Fed vice chairs Roger Ferguson and Don Kohn.
None of those candidates were identified as likely successors, although two economists said Obama would be wise to tap Summers and one said ideally Ferguson would get the nod.
Whoever succeeds Bernanke will face the difficult task of managing an economy that remains fragile.
The Fed's next leader will also presumably have to gracefully manage the Fed's retreat from its extraordinary stimulus measures, a balancing act whose trickiness has been highlighted by recent market turbulence.
Risky assets and Treasury bonds have sold off sharply since Bernanke suggested on May 22 that the Fed could begin scaling back the $85 billion in bonds it is buying each month at one of its "next few meetings."
The Fed, which brought interest rates to effectively zero in late 2008, is on track to buy more than $3 trillion in mortgage and government bonds to boost growth. It has committed to keep purchasing assets until the outlook for jobs improves substantially.
The jobless rate has fallen from around 8 percent last summer to 7.6 percent in May, while employment growth has averaged around 176,000 over the last 12 months.
Economic growth remains erratic.
Housing is on the mend, and the blow from fiscal tightening from Washington has not been as severe as some feared.
Manufacturing remains weak, however, and economic growth appears to have shifted down in the second quarter after expanding at a modest 2.4 percent annualized rate in the first three months of this year. <ecilt us="">
Bernanke, a Republican, was originally appointed to the Fed chairmanship by President George W. Bush. Obama reappointed him in the aftermath of the financial crisis.
(Polling by Ramya Muthukumaran and Snehasish Das; Editing by Chizu Nomiyama)
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