Washington talk points at Summers as front-runner for Fed chair

FXstreet.com (Barcelona) - Talk has it that the new front-runner to replace Federal Reserve Chairman Ben Bernanke at the end of his second term on January 31, 2014, is now Larry Summers, followed closely by Janet Yellen, while others such as Roger Ferguson, Tim Geithner, Alan Blinder, according to the Washington Post, appear to be well behind.

As reported by Ezra Klein at the Washington Post: "People dismissed Summers’s chances a month or two ago, but he’s increasingly viewed as the leading candidate today — and opinions on this, for reasons I don’t fully understand (though I suspect have to do with a bunch of elite trial balloons going up at the same time), have really hardened in the last 72 hours."

Klein mentions that the main reasons why Summers has emerged as the new favourite candidate again are President Obama really likes Summers, ability to keep dual mandate of full employment and low inflation, ability to handle a crisis, Summers has the market’s trust in a way Yellen doesn’t. However, Klein warns Summers' confirmation would be more difficult to find consensus than Yellen’s, mainly on Republicans demands to answer controversial issues on stimulus and the bailouts.