Japanese business newspaper Nikkei said Friday that President Barack Obama could pick Larry Summers as the next Federal Reserve chairman. Citing unnamed sources, Nikkei said that President Obama is in the final stage, and is leaning toward Larry Summers. According to Reuters, the newspaper said that President Obama is set to announce Summers’ name by the end of next week.
Larry Summers Obama’s favorite?
However, the White House denied Nikkei‘s reports. White House spokeswoman Amy Brundage said in a tweet that the Japanese press reports aren’t true, and President Obama hasn’t made any decision on the Fed yet. Over the past few months, there have been consistent reports that Larry Summers is President Obama’s favorite pick to lead the Federal Reserve. So, it wouldn’t surprise anyone if Summers gets the green signal. The timing “by the end of next week” also makes sense. That’s because the Fed is holding its next policy meeting on Tuesday and Wednesday next week, when it’s expected to announce a gradual stimulus pullback. Economists expect that the Federal Reserve will initially cut the bond-buying program from $85 billion a month to $75 billion a month.
Debate in Washington is heating up over who will be the next Federal Reserve chairman. Ben Bernanke’s term expires in January 2014. It’s the race between Federal Reserve vice-chairman Janet Yellen and former Treasury Secretary Larry Summers. President Obama could announce his pick by next month. But his nomination has to be approved by the Senate.
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Senators and economists oppose Larry Summers
A large number of Senators, especially Democrats, have opposed the nomination of Summers. Summers was the Treasury Secretary during former President Bill Clinton’s tenure. Senators argued that Summers eased banking restrictions and failed to regulate derivatives during his tenure as Treasury Secretary.
Earlier this week, about 400 economists sent President Obama a letter, urging him to name Janet Yellen as the next Federal Reserve chairman.