Will Janet Yellen Become the Next Fed Chair?

FT writes:

Janet Yellen has emerged as the clear frontrunner to become the next chair of the US Federal Reserve, but the choice belongs to one man – Barack Obama – and the selection process can be hard on favourites. As the Fed’s current vice-chair, and an architect of its strategy to purchase assets and keep interest rates low until the unemployment rate falls below 6.5 per cent, Ms Yellen is the obvious choice to succeed Ben Bernanke when his term expires at the start of 2014. “The overwhelming consensus – and I think correctly so – is that it will be Janet Yellen,” says Chris Krueger, senior policy analyst at Guggenheim Partners in Washington. She would be a historic appointment as the first woman to lead the Fed, he notes, in addition to her extensive economic credentials. But presidents usually have more on their minds than just the technical suitability of a candidate and the obvious next-in-line does not always win out.

It's is a big stretch to argue that Yellen was "an architect" of the Fed's strategy. The moves made came right out of the playbook of Ben Bernanke, read his writings, its all there.

Yellen has been nothing but a high kick cheerleader (if you can picture that) of Bernanke's play calling. Cheerleading, though, is something of a step up for Yellen, I have been reading her Fed-related speeches, since she was president of the San Francisco Fed branch. Her speeches were very wishy-washy back then and only took a more aggressive money printing stance as she clearly started aiming for the Fed vice-chair position. Indeed, in 2008, I  wrote:

I must again mention that Yellen's new speechwriter of recent months is a major improvement, the old hedging sluggish Yellen speeches of the past are gone. At least you can understand what Yellen is saying, and now there is a strong analytical touch to the speeches.

We will know in late summer/early fall if Bernanke stays or whether a new person will sit in the Fed chair in 2014. Yellen probably is the front runner, though I remain curious about the fact that US citizen, Bank of Israel Governor Stanley Fischer is stepping down as head of BOI on June 30th. Fischer was Bernanke's PhD thesis adviser at MIT and may want a shot at managing the Big Money Printing Show.